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NEWS RELEASE GRAND JURY RETURNS INDICTMENT CHARGING KENNEDY, HANSEN by ylo13183

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									                                      U.S. Department of Justice
                                      Brett L. Tolman

                                      United States Attorney
                                      District of Utah


________________________________________________________________________

FOR IMMEDIATE RELEASE                     CONTACT: MELODIE RYDALCH
Dec. 11, 2009                                      801-325-3206
                                                   801-243-6475 (CELL)




                           NEWS RELEASE
         GRAND JURY RETURNS INDICTMENT
            CHARGING KENNEDY, HANSEN
       WITH WIRE FRAUD, CONPSIRACY, MONEY
         LAUNDERING IN CONNECTION WITH
      REAL ESTATE CONSTRUCTION LOAN SCHEME

      SALT LAKE CITY – Uriah A. Kennedy, age 34, of Midvale and Gregory
Lee Hansen, age 55, of West Jordan, who were involved in real estate development
ventures including a proposed 80-unit condominium project on North Temple in
Salt Lake City, are charged with wire fraud, conspiracy, and money laundering in a
24-count federal indictment returned by a grand jury late Wednesday afternoon.

       The indictment, which follows an investigation by the FBI, alleges Hansen
and Kennedy, with others, formed a real estate development venture to focus on
the development of single-family housing projects under the name Tradewest
Homes. Hansen and Kennedy transferred approximately 60 unfinished single-
family home projects into this company with a plan to obtain financing and finish
the projects, the indictment alleges.

       Subsequently, the indictment alleges, Hansen and Kennedy formed an entity
called Spyglass Properties to develop and build an 80-unit condominium project at
644 West North Temple in Salt Lake City.
      The indictment alleges the defendants applied for a construction loan of
about $18 million from Arkansas National Bank, a national banking company
which maintained an office in St. George, Utah, ostensibly to acquire the property
and build the condominiums on the 1.7 acre parcel of property. This development
became known as the Kennedy Town Center Project.

       According to the indictment, Hansen and Kennedy assured ANB that the
proceeds of the loan would be used solely for the purchase of the property and the
construction and building of the 80-unit project. The loan was structured so it
would be released in phases based on invoices and periodic engineering
certifications to ANB that the previous phase of the construction had been properly
completed. Hansen and Kennedy and their associates were required to furnish to
ANB written invoices and draw requests which affirmatively represented to ANB
how the loan proceeds would be put to use.

       The indictment alleges that instead of using all of the proceeds of the ANB
loan for purchase of the property and construction of the Kennedy Town Center as
promised and terms of the loan required, the defendants diverted hundreds of
thousands of dollars in ANB loan proceeds for unrelated personal purposes and for
other residential construction projects, including the unfinished Tradewest Homes
construction projects.

       According to the indictment, these diversions from the ANB loan began to
immediately threaten the viability of the Kennedy Town Center project and the
ability to repay the ANB loan. In order to conceal the diversion of funds from the
ANB loan to other projects, the indictment alleges the defendants created and
submitted false and deceptive documents to support the release of the funds.

       After depleting almost $17 million of the available ANB loan funds, the
indictment alleges the defendants abandoned the Kennedy Town Center project
with little more visible above ground-level than a slab of cement, failed to make
payments on the ANB loan, and left ANB with a loan secured by property worth
far less than the outstanding loan balance.

       The indictment includes 10 counts of wire fraud involving a financial
institution and one count of conspiracy, which each carry a potential maximum
penalty of 30 years in federal prison per count and a fine of up to $1 million.
Additionally, the indictment alleges 13 counts of money laundering, which carry
maximum penalties of 10 years per count and a fine of up to $250,000 or an
alternative fine of not more than twice the amount of the criminally derived
property. Defendants charged in indictments are presumed innocent unless or until
proven guilty in court. Summons will be issued to Hansen and Kennedy for an
initial appearance on the charges. A date has not been set.

       Misiona Patane Jr., age 45, of West Valley City, referenced in the indictment
as a project manager engaged in the business of monitoring construction project
progress, controlling costs, and ensuring proper use and disbursement of project
loan fund, was charged by Felony Information. He pleaded guilty to one count of
wire fraud Monday and faces up to 30 years in prison when he is sentenced. A
sentencing date has not been set.


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