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Thursday, July 25, 2019

ROBERT BUCKHANNON PLEADS GUILTY TO WIRE FRAUD: Will This 'Phoenix' Continue To Rise In His Cryptocurrency, CBD & Cash Advance Schemes?

That thud you heard earlier this afternoon was Robert Buckhannon rolling over on his former squeeze, Kelly Demoss.

During a 27-minute criminal proceeding this afternoon in United States District Court for the Western District of Michigan in Grand Rapids, Robert Buckhannon (Battle Creek's notorious crooked chiropractor) formally entered a guilty plea to Count 1 his August 8, 2018 indictment: Conspiracy To Commit Wire Fraud. (Buckhannon, whose con career is as sturdy as a cockroach, recently teamed up with fellow fraudster Zia Shlaimoun. Expanding their 2018 cryptocurrency scam, adding CBD and cash advance components under the name Phoenix Rising Ventures LLC, the fleece continues.)

Buckhannon and Demoss were indicted last year on a total of five criminal counts relating to the duo's management of Battle Creek's On Deck Bar. In addition to the conspiracy to commit wire fraud charge, the two were indicted on one count of Wire Fraud and three counts of money laundering.

On May 30, 2019, Buckhannon inked a plea deal, agreeing to roll over on Kelly Demoss and become what's known as a cooperating witness.

In a report issued today, U. S. Magistrate Judge Ellen Carmody recommended that Buckhannon's “plea of guilty to Count One of the Indictment be accepted, that the court adjudicate defendant guilty, and that the written plea agreement be considered for acceptance at the time of sentencing. Acceptance of the plea, adjudication of guilt, acceptance of the plea agreement, and imposition of sentence are specifically reserved for the district judge.” 

As detailed in the factual basis for the plea, Buckhannon admitted his role in a scheme to defraud Blackburne & Sons Realty Capital Corporation, perpetrated with DeMoss: 

Between in or about June 2013 to in or about October 2013, in Calhoun County, Michigan, the defendant knowingly and voluntarily agreed with his co-defendant, Kelly Jane DeMoss, to devise and execute a scheme to defraud Blackburne & Sons Realty Capital Corporation (“Blackburne”) to obtain money by false and fraudulent pretenses, representations, and promises. 

The object of this illegal agreement was to unlawfully enrich themselves by converting to their own personal use a portion of the business loan proceeds that were intended for the On Deck Sports Bar & Grill in Battle Creek, Michigan. 

As part of the scheme to defraud, the defendant and DeMoss falsely represented to a Blackburne representative that On Deck was located in a 5-unit mixed use building with four rentable office spaces, and that three of those spaces already were leased to three tenants. 

In truth, the second floor of the building had no rentable offices and the third floor was an unfinished storage area. 

The defendant sent Blackburne three “Lease Agreement” documents that falsely represented to Blackburne that On Deck had three one-year signed lease agreements totaling $42,000 per year of rental income. 

Both the defendant and DeMoss knew that On Deck did not have valid, signed lease agreements obligating three tenants to pay $42,000 per year of rental income. 

The defendant also sent to Blackburne two purported rent checks, which falsely and fraudulently represented to Blackburne that On Deck had valid lease agreements with, and genuine first month rent checks, from both of those tenants. 

Because Blackburne had requested proof of this additional income in the form of signed lease agreements and first month rent checks, the Defendant and DeMoss knew that the additional income was important to Blackburne’s decision whether to extend a business loan to On Deck. 

Another component of the scheme to defraud Blackburne was an agreement to use a portion of On Deck’s business loan proceeds to help finance the purchase of a personal residence for the defendant and DeMoss. 

At no time did the defendant or DeMoss tell Blackburne that they intended to use a portion of On Deck’s business loan proceeds to help finance the purchase of a personal residence for the defendant and DeMoss, nor did they obtain approval from Blackburne to use the proceeds for a personal residence. In about October 2013, DeMoss purchased a personal residence at 224 Wahwahtaysee Way in Battle Creek. 

The true source of the approximately $36,000 in down payment money for the residence was proceeds from Blackburne’s business loan to On Deck. Blackburne, having no knowledge of the diversion of the loan proceeds to fund DeMoss’s purchase of the personal residence at 224 Wahwahtaysee Way, had no mortgage on that property. 

Although a presentencing report was ordered, a formal date for Buckhannon's sentence has not been set.

More on this story as it develops.

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