Thursday, March 24, 2016
Greene County businessman sentenced for bank fraud
A Bois D’Arc, Mo., business owner was sentenced in federal court today for a bank fraud scheme related to the construction of his $1.6 million residence.
Michael R. Ussery, 58, of Bois D’Arc, was sentenced by U.S. District Judge M. Douglas Harpool to two years in federal prison without parole. The court also ordered Ussery to pay $1.3 million in restitution to Mid-Missouri Bank.
On Oct. 30, 2015, Ussery was convicted at trial of 12 counts of bank fraud. Ussery was the owner/operator of two businesses in 2007, USS Properties and Villa Properties, both of which purchased real estate for residential development.
During this time, Ussery also was building a $1.6 million home for himself in Bois D’Arc. Mid-Missouri Bank agreed to provide a $1.6 million construction loan to build the residence; $1.15 million was used to pay off the previous bank which had financed the construction of the residence up to that point, and the remaining $450,000 was supposed to have gone to completing the construction of the residence. When persons worked on the house, Ussery was supposed to obtain an invoice and a lien waiver from the contractors and submit these documents to Mid-Missouri Bank, which would then make a disbursement of the amount owed to Ussery’s personal bank account.
A dozen invoices and lien waivers totaling $315,417 were submitted to Mid-Missouri Bank from May 29 to June 25, 2007, purportedly from persons or companies building the residence, to draw money from the $1.6 million loan amount for construction of the residence. In fact, each invoice and lien waiver was false, faked or forged. They were either created by, or caused to be submitted by, Ussery, and contained materially false or fraudulent representations. The companies or persons who were indicated on the fraudulent invoices and lien waivers did not prepare or submit the invoices and lien waivers, did not perform the work on the property as indicated in the invoices, did not agree to waive any lien on the residence for work actually done on the property, and did not receive any payments for work done as indicated in the invoices. A handwriting expert testified that Ussery’s handwriting was on every false lien waiver document.
Along with the lien waivers and the invoices submitted, there were checks purported to have been written on Ussery’s checking account to the persons that Ussery claimed had done work on the residence. There is no record of any of these checks having been cashed by the contractors or businesses for which Ussery wrote out the checks. Representatives of these businesses testified that Ussery never provided them with the checks attached to the lien waivers, which had been attached to the disbursement forms as a record of the amount allegedly paid by Ussery to the business.
For example, Ussery admitted at trial that he signed one of the lien waivers for services provided by the Davis Cabinet Shop, a company operated by his father-in-law. The handwriting expert also concluded that Ussery wrote a $42,609 check to Davis Cabinet Shop, which was purported to be for cabinet work at the residence. This check was never cashed and the bank’s building inspector did not observe any cabinets in the house during the time of the construction of the house or later when the residence was eventually sold after foreclosure. During the trial, the person who purchased the Bois D’Arc residence at the foreclosure sale testified that Ussery approached him and asked him to testify that when he bought the property in the foreclosure sale that there was cabinet material in the house which corresponded to the Davis Cabinet Shop lien waiver. In exchange for this testimony, Ussery offered to loan him money. The new owner, however, testified at trial that when he purchased the residence, there was no cabinet material in the house, apart from scrap material in the garage, and there were no cabinets installed in the house.
Auditors at the bank visited the construction site in June and July of 2007 and saw nothing that would indicate that this amount had been spent on the construction of the residence, apart from the hanging of drywall. Mid-Missouri Bank actually deposited $315,417 into Ussery’s personal bank account based upon the fraudulent representations contained in the lien waiver and invoice documents.
Ussery wrote checks from his bank account where the loan amounts for his house were deposited to either of his two businesses. Afterwards, it appears that the money, which had been meant for building the house, was deposited instead into bank accounts relating to USS Properties or Villa Properties. This activity occurred while both businesses were under severe economic strain, which eventually led to their bankruptcy.
Ussery eventually stopped construction on the Bois D’Arc property and the bank had to foreclose on the loan. The bank took a $782,349 loss after the sale of the property with its partially finished house. The bank also paid a total of $103,257 to settle mechanic liens placed on the residence by the contractors that Ussery claimed he had paid in the false lien waivers. Ussery filed for bankruptcy relief in 2011.
Although not charged in the indictment, evidence introduced during the trial indicated that Ussery also committed similar fraudulent activity against a husband and wife who hired him to build a personal residence in Greene County, Mo. Ussery started construction of the house in 2007, but did not complete the project. The victim clients discovered that Ussery was providing false lien waivers to Great Southern Bank to obtain loan draws from the construction loan.
This case was prosecuted by Supervisory Assistant U.S. Attorney Randall D. Eggert and Assistant U.S. Attorney Patrick Carney. It was investigated by IRS-Criminal Investigation, the U.S. Secret Service and the Springfield, Mo., Police Department.