Wednesday, September 9, 2015

Kingsville couple sentenced for bank fraud scheme in Lee’s Summit

A Kingsville husband and wife were sentenced in federal court Tuesday for a $664,000 bank fraud scheme related to his work on a Lee’s Summit subdivision.

Dennis R. Key, 52, and his wife, Michal Ann Key, 49, both originally of Kingsville, were sentenced by U.S. Chief District Judge Greg Kays.

Dennis Key was sentenced to three years and five months in federal prison without parole. Michal Key was sentenced to 18 months in federal prison without parole. The court also ordered the Keys to pay $664,393 in restitution to their victim.

According to Tammy Dickinson, United States Attorney for the Western District of Missouri, on Sept. 25, 2014, the Keys pleaded guilty to bank fraud. The Keys admitted that they engaged in a four-year-long bank fraud scheme from August 2006 to November 2009. They stole $664,393 from Dennis Key’s longtime friend by double-billing him for work building a house, and by concealing that double-billing through hidden fees, shell companies and bank accounts, and by signing false and fictitious names to checks.

Dennis Key was the owner of DM & Associates, LLC, a land surveying and engineering consulting business in the Kansas City area. Michal Key did administrative and clerical work for the business, including bookkeeping, paying bills and writing checks.

In January and February 2005, Dennis Key entered into two contracts with his friend, under which he would be paid for surveying and engineering in relation to developing part of a subdivision in Lee’s Summit, and for project management/general contracting in building a house for his friend in that subdivision.

In August 2006, Dennis Key arranged for JM Contractors to act as general contractor for the construction work and to subcontract work to be performed. He instructed JM Contractors to add an extra 15 percent to its fee, which would be paid to Dennis Key. Dennis Key also instructed JM Contractors to conceal the mark-up by hiding the fee in each line item on the bills. Through this contractor, Dennis Key received a $97,500 kickback.

Key also lied to his friend by telling him JM Contracting was a subcontractor, not a general contractor. His friend also lost the $203,361 that he paid JM Contracting for work he had already paid Dennis Key to do, federal prosecutors said.

The Keys also created various shell companies with names similar to the subcontractors working on the house. When they received the real bills from the subcontractors, they prepared false inflated bills and invoices in the names of the shell companies and submitted those for payment. When they received payment, they deposited the funds into the bank accounts of their shell companies. They transferred the funds to their personal bank account, paid the actual subcontractors the amount owed and kept the difference.