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.
