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Tuesday, September 4, 2018

SOME PEOPLE WILL DO ANYTHING FOR MONEY: Robert Buckhannon, Former Girlfriend Kelly DeMoss Indicted On Five Criminal Counts Related To Battle Creek's On Deck Bar, Including Defrauding A Lender; Wire Fraud & Money Laundering Convictions Could Net Duo 20 Years In The Grey Bar Hotel!

BREAKING NEWS! KELLY DEMOSS, ROBERT (The Crooked Chiropractor) BUCKHANNON INDICTED FOR THEIR ROLES IN SCHEME TO DEFRAUD LENDER OF NEARLY $500,000; DUO ALLEGEDLY USED LOAN PROCEEDS TO BUY A BATTLE CREEK HOME

“Robert Lyle Buckhannon and Kelly Jane Demoss did conspire with each other to devise a scheme and artifice to defraud and to obtain money from Blackburne & Sons Realty Capital Corporation by means of false and fraudulent pretenses, representations, and promises using wire communications in interstate commerce.”

United States of America v. 
Robert Lyle Buckhannon and Kelly Jane Demoss
August 8, 2018 Grand Jury Indictment

Nearly five years after a suspicious fire destroyed the On Deck, a Battle Creek sports bar, its former owner, Kelly DeMoss, and manager, Robert Buckhannon (shown together in 2013 photo above), have been indicted in federal court on various charges relating to a “conspiracy was to obtain money by means of false and fraudulent pretenses and representations to unlawfully enrich themselves, including by converting to their own personal use business loan proceeds fraudulently obtained from Blackburne that were intended for On Deck Sports Bar & Grill LLC”. 

DeMoss and Buckhannon are each charged with a total of five counts: one count of conspiracy to commit wire fraud, one count of wire fraud and three counts of money laundering. If convicted, maximum penalties range from 10 to 20 years, plus mandatory restitution. 

DeMoss appeared in court on August 27, 2018, and was subsequently released on $25,000 bond. 

UPDATE-September 5, 2018: DeMoss arraigned, pleaded not guilty.

On June 6, 2018, Robert Buckhannon received a three-year probation sentence in exchange for an August 1, 2017 guilty plea on one count of conspiracy to commit wire fraud relating to his role in a $34 million hedge fund fraud.


BACKROUND 

In September 2012, DeMoss registered with the State of Michigan a limited liability company under the name “On Deck Sports Bar & Grill LLC” (“On Deck”). In a 2013 Annual Statement filed with the state, the registered business address for On Deck was 225 W. Michigan Avenue, Battle Creek, Michigan. DeMoss was identified as the registered agent for, and sole Manager of, On Deck. 

In the same month, DeMoss registered a limited liability company in the State of Michigan under the name “S.G.E. Investments, LLC” (“S.G.E.”) In a 2013 Annual Statement filed with the state, the registered business address for S.G.E. was 200 WahwahtayseeWay, (shown above) Battle Creek, Michigan. DeMoss was identified as the registered agent for, and sole Manager of, S.G.E.

Blackburne & Sons Realty Capital Corporation (“Blackburne”) was a nationwide private money commercial lender headquartered in Sacramento, California. Blackburne was in the business of originating commercial loans, selling ownership interests in those loans, and servicing those loans. 

On Deck was a sports-themed restaurant and bar located in a three-story building at 225 W. Michigan Avenue, Battle Creek, Michigan. 

In April 2013, after extensive remodeling of the first floor and second floor mezzanine interior of the building, Buckhannon and DeMoss opened On Deck for business. 

Buckhannon and DeMoss represented that S.G.E. was the sole owner of On Deck. Buckhannon was designated the General Manager of On Deck who, along with DeMoss, was responsible for the day-to-day operation of the business. 

When On Deck opened in April 2013, Buckhannon and DeMoss shared a residence at 200 Wahwahtaysee Way, Battle Creek, Michigan. In May 2013, On Deck was forced to close as a result of a legal dispute with one of its private investors and remained closed for several months. 

In order to resolve the dispute and re-open the business, On Deck required a substantial infusion of cash. 

In about June 2013, Buckhannon and DeMoss sought to obtain a private loan for On Deck to resolve the legal dispute, pay off certain business debts, and re-open the business. 

While searching for a lender who would loan them $500,000 to re-start operations, Buckhannon and DeMoss, through a commercial loan broker, represented to Blackburne that On Deck was located in a 5-unit mixed-use building with four rentable office spaces totaling 4,500 square feet. 

Buckhannon and DeMoss represented that the office space was pre-leased to three tenants. 

No later than August 2013, Buckhannon and DeMoss entered into negotiations with Blackburne to obtain a commercial loan for On Deck. 

Buckhannon and DeMoss represented to Blackburne that On Deck would use the loan proceeds to settle the legal dispute with the investor; pay off a note on the property; pay off building improvement debts and revolving credit debts for certain furniture, fixtures, and equipment; and for working capital. 

But here’s what Buckhannon and DeMoss concealed from Blackburne: they planned to use the business loan proceeds for personal expenses, including the purchase of a personal home for DeMoss. 

The August 8, 2018 indictment alleges the two did not obtain approval from Blackburne to use the proceeds for personal expenses. 

Blackburne required documentation of On Deck’s lease agreements with the three purported tenants. 

On or about August 8, 2013, Robert Buckhannon sent an e-mail to a Blackburne representative indicating that he was working on obtaining a copy of the leases from his attorney’s office. 

On or about August 9, 2013, Kelly DeMoss signed, on behalf of On Deck, S.G.E., and herself, a Blackburne loan approval letter agreeing to borrow $494,000 from Blackburne for On Deck’s “mixed-use property with 5-units” located at 225 W. Michigan Avenue in Battle Creek. The loan was subject to limitations and conditions, including “Current executed copies of all leases.” 

The indictment alleges that, on or about August 21, 2013, and again on September 4, 2013, Buckhannon sent an e-mail to a Blackburne representative that indicated in the body of the message, “Please find the leases attached.” The attachment was a document entitled “On Deck Leases.pdf.” The attachment contained three documents that were entitled “LEASE AGREEMENT.” 

The documents represented to Blackburne that On Deck had three one-year signed lease agreements totaling $42,000 per year of rental income, as follows: 

a. A lease dated July 15, 2013, between On Deck and Tenant 1 for “600 square feet on the second floor and 1,400 square feet on the third floor of the south building” commencing October 1, 2013, and ending September 30, 2014, at a rate of $1,500 per month. The document was purportedly signed by Tenant 1 and countersigned by Buckhannon for On Deck. 

b. A lease dated August 5, 2013, between On Deck and Tenant 2 for “1,200 Square feet on the Third Floor North, Unit 301A” commencing October 1, 2013, and ending September 30, 2014, at a rate of $1,000 per month. The document was purportedly signed by Tenant 2 and countersigned by Buckhannon for On Deck. 

c. A lease dated July 29, 2013, between On Deck and Tenant 3 for “1,200 Square feet on the south end of the Third Floor, South Unit 302A” commencing October 1, 2013, and ending September 30, 2014, at a rate of $1,000 per month. The document was purportedly signed by Tenant 3 and countersigned by Buckhannon for On Deck. 

In truth and fact, each purported “LEASE AGREEMENT” was fake and fraudulent, as On Deck did not have valid, signed leases with tenants. The second floor in the front of the building (shown above) consisted of a bar area, dance floor, and seating, and the rear was unfinished. 

The third floor was an unfinished storage area.  

DISCOMFORT INN: KELLY DEMOSS BUYS A HOME--USING BLACKBURNE'S BUSINESS LOAN CASH. 

During the period of time On Deck was closed (between April-early November 2013), Robert Buckhannon and Kelly DeMoss moved out of the Fell Mansion, located at 200 Wahwahtaysee Way, in Battle Creek, Michigan, stored their belongings, and moved into a Battle Creek motel, a local Comfort Inn. 

On or about September 4, 2013, Kelly DeMoss signed a contract to buy a house located at 224 Wahwahtaysee Way in Battle Creek for $172,000 with a $2,500 deposit. At the time, DeMoss did not have the funds for the deposit or a down payment for a personal residence. 

On or about September 10, 2013, a Blackburne representative e-mailed Robert Buckhannon asking On Deck to provide him with “verified deposits for the leases.” Buckhannon replied, “Let me get you the copies of the checks.” 

Buckhannon further indicated that the rent checks would be held and deposited upon closing the loan with Blackburne. Blackburne later received copies of at least two purported rent checks. 

The first check was dated October 1, 2013, and made payable to On Deck for $1,500 for “October Rent” that appeared to be signed by Tenant 1. 

The second check was dated October 1, 2013, and made payable to On Deck for $1,000 for “Rent” and appeared to be signed by Tenant 2. 

Those checks falsely and fraudulently represented to Blackburne that On Deck had valid lease agreements with, and genuine first month rent checks from, those tenants when in fact it did not. 

On or about September 26, 2013, DeMoss signed a residential loan application to borrow $137,600 to purchase the home at 224 Wahwahtaysee Way. 

The application advised DeMoss that she would be required to pay $37,274.94 in cash at closing to purchase the home. 

In the meantime, Blackburne was unable to close the On Deck loan on the original terms. 

On or about October 2, 2013, Kelly DeMoss signed on behalf of On Deck, S.G.E., and herself, another Blackburne loan approval letter agreeing to borrow $456,000 from Blackburne on terms less favorable to On Deck. 

The document included a condition that Blackburne receive a copy of all lease and rental agreements. 

On or about the same day, Buckhannon and DeMoss sent the agreement to Blackburne…using a facsimile machine at the Comfort Inn motel in Battle Creek. (Badda book, badda boom!)



By October 9, 2013, the $456,000 Blackburne loan was approved, closed, and was fully funded. Blackburne recorded a mortgage on the On Deck property as security for the loan. Additionally, DeMoss was personally liable to repay the loan. 

On or about October 10, 2013, Kelly DeMoss received and deposited a check in the amount of $126,169.10, which consisted of Blackburn loan proceeds, into On Deck’s Comerica Bank account #XXXXXXX456. 

Prior to that deposit, On Deck had $0 in the account. DeMoss wrote several checks to make payments on several business and personal debts, including a personal vehicle loan. 

On October 11, 2013, Kelly DeMoss wrote a $2,600 check from On Deck’s Comerica Bank account #XXXXXXX456 payable to Robert Buckhannon’s son, Robert Shea Buckhannon, a 20-year-old student at Michigan State University. 

The memo line of the check read “Deposit” and DeMoss wrote “Deposit House” in the check register column entitled “In Payment Of.” According to the August 8, 2018 indictment, the purpose of this check was to repay a loan Buckhannon and Demoss obtained from Buckhannon’s college student son, Robert Shea Buckhannon

The “loan” enabled Robert Buckhannon and Kelly Demoss to purchase the home at 224 Wahwahtaysee Way. 

On or about October 12, 2013, Kelly DeMoss wrote a $36,500 check from On Deck’s Comerica Bank account payable to Robert Buckhannon. The memo line of the check was left blank. However, Kelly DeMoss wrote “House” in the check register column entitled “In Payment Of.” 

On or about the same day, Robert Buckhannon deposited $36,300 from that check into his account at Comerica Bank #XXXXXXX716. Prior to the deposit, he had $0 in that account.

On or about October 15, 2013, Buckhannon purchased a Comerica Bank Cashier’s Check in the amount of $36,000 payable to Kelly DeMoss by withdrawing funds from his personal Comerica Bank account #XXXXXXX716. 

The source of the funds was the $36,500 check he deposited three days earlier. The Cashier’s Check receipt included a handwritten notation: “Gift.” 

On or about the same date, DeMoss deposited the $36,000 Cashier’s Check into her account at Chemical Bank #XXXXXXX847, completing the alleged money laundering cycle. 

Prior to the deposit, DeMoss had $432.95 in that account. 

On or about October 15, 2013, Buckhannon and DeMoss signed a document entitled “GIFT LETTER AFFIDAVIT” in connection with the purchase of the 4,450 square foot home located in Battle Creek at 223 Wahwahtaysee Way (shown below). 

The document falsely represented that Buckhannon provided DeMoss with an outright gift to assist her with the closing of a real estate loan for the residence and that DeMoss would not be obligated to repay the money at any time. 

In truth and fact, the source of the $36,000 was Blackburne loan proceeds from On Deck’s account, funds which DeMoss and On Deck were obligated to repay to Blackburne.

On or about October 30, 2013, Kelly DeMoss signed an updated residential loan application to finance the purchase of 224 Wahwahtaysee Way. 

DeMoss reported no personal debts or liabilities despite being personally obligated to repay the $456,000 Blackburne loan. Also on that date, DeMoss wired $36,584.16 from her Chemical Bank account #XXXXXXX847 to a title company to purchase 224 Wahwahtaysee Way. 

Blackburne had no knowledge that Buckhannon and DeMoss used On Deck’s loan proceeds for the purchase of the personal residence and had no mortgage on 224 Wahwahtaysee Way. (NOTE: DeMoss unloaded the home on April 12, 2017 for $259,900, roughly 51 percent higher than 2013's $172,000 purchase price.)

As of October 31, 2013, On Deck’s Comerica Bank balance was overdrawn by $30.71. 

In late November 2013, On Deck reopened for business. 

On December 30, 2013, On Deck was destroyed by a fire that originated in the third floor storage area. 

As a result of both the Robert Buckhannon/Kelly DeMoss scheme and artifice to defraud Blackburne and the fire, Blackburne and On Deck’s insurance carrier suffered financial losses.

Tomorrow, more about the criminal counts! 


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13 comments:

  1. Isn't her name Kelly Buksar Flees now as she recently married

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    Replies
    1. Hope that new last name isn't prophetic!

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    2. I wonder if her new husband knew about all that baggage she was bringing on board. Heard he's in Russia, where does he find people that actually believe he needs to travel?!?!

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    3. You can thank the U. S. Attorney in Las Vegas for expressing “no objection to Mr. Buckhannon having any unrestricted travel upon notification to his probation officer” in a June 7, 2018 court document.

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  2. Remarried and owns flower/wine shop in Marshall Michigan

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  3. Nothing will happen to her, her boyfriend Rob got a slap on the hand for ripping off $34 million she will come out smelling like a rose

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    Replies
    1. I'll check back with you when the case goes to the jury.

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  4. He will rat Kelly out in a heartbeat. He bit the big one this time the feds in GR don't play. According to my sources conspiracy charges are pending as well. I'm sure his trip to Ecuador was a dry run I'm sure he will run like the little bitch he is!

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    1. What ever happened to the fire investigation? They used big heaters to melt the ice to look for accelerates. Could arson charges still be coming?

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    2. I think Kelly will be on it first first come first serve LOL she probably has information about the arson I think it's going to get interesting

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    3. Word on the street is that the security camera system's DVR was found unplugged the night of the fire. So I'd say its likely now after this battalion of fraud charges it now paves the way for a clear cut motive for RB to burn the joint down take the loot stiff everybody and then convince Kelly to file BK. The heat was on as the lender that funded the loan was premature in releasing all the funds while RB was still awaiting proof of revenues from his so called attorney "underwriting smelled a rat" Whats more relevant is RB knew the MLCC was investigating Kelly and the bar for purchasing liquor from a non-authorized third party and also having RB telling everybody he was the owner but his name did not appear on the MLCC license. Also the MLCC was notified of a pending lawsuit alleging another outside investor was involved in ownership and again not listed on the license required by law.


      https://www.michigan.gov/lara/0,4601,7-154-10570---,00.html

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  5. Word on the street is true.

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