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Friday, August 30, 2019

DEMOSS SENTENCING SET FOR DECEMBER 16

Kelly Demoss, who entered a plea of guilty yesterday during a sentencing hearing in U. S. District Court in Grand Rapids, is scheduled to be sentenced on December 16, 2019.

Demoss plead guilty to one count of misprision of felony, per a formal plea agreement made public August 19, 2019

Demoss slipped the noose when federal prosecutors, in return for a guilty plea, agreed to drop the original counts from her August 8, 2018 criminal indictment, relating to fraudulent activity that hastened the demise of Battle Creek's On Deck Bar, including one count of conspiracy to commit wire fraud, one count of wire fraud and three counts of money laundering. 

In his official report and recommendation (filed yesterday), U. S. Magistrate Judge Phillip J. Green stated:

“On the basis of the record made at the hearing, I find that defendant is fully capable and competent to enter an informed plea; that the plea is made knowingly and with full understanding of each of the rights waived by defendant; that it is made voluntarily and free from any force, threats, or promises, apart from the promises in the plea agreement; that the defendant understands the nature of the charge and penalties provided by law; and that the plea has a sufficient basis in fact.” 

As part of her plea deal, Demoss “carefully reviewed the allegations contained in the Superseding Felony Information” and agreed they are correct: 

(1) Robert Lyle Buckhannon committed and completed the crime of wire fraud against Blackburne & Sons Realty Capital Corporation; 

(2) Demoss had knowledge of Buckhannon’s crime; 

(3) Demoss failed to notify law enforcement in Calhoun County or elsewhere in the Western District of Michigan; and 

(4) Demoss took an “affirmative step” to conceal Buckhannon’s crime. 


But there's much more.

According to documents filed in the case, Demoss was able to buy a 4,450 square foot house, (pictured above) by using money from a $456,000 hard money loan intended for the On Deck Bar: 

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 26, 2013, DeMoss signed a residential loan application to borrow $137,600 to purchase the Wahwahtaysee home. 

The application advised Demoss that she would be required to pay $37,274.94 in cash at closing to purchase the home. 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, Demoss received and deposited a check in the amount of $126,169.10, which consisted of Blackburne loan proceeds, into On Deck’s Comerica Bank account. 

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 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. 

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. 

The source of the funds was the $36,500 check Buckhannon had 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, completing the alleged money laundering cycle. 

In the plea agreement, Demoss agreed to cooperate with the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), the U. S. Attorney’s Office, and any other law enforcement agency in their investigation of the charges contained in the indictment and information.

Maybe we'll find out who torched the On Deck.

Rob made me do it...that's one helluva sweet deal, Kelly!

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