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FOR IMMEDIATE RELEASE |
June 8 , 2009
LAWRENCE BUILDER CHARGED WITH BANK FRAUD CONSPIRACY IN JUNCTION CITY HOUSING DEVELOPMENT PROJECT
TOPEKA, KAN. – David Ray Freeman, 45, Lawrence, Kan., has been charged with fraud in connection with a Junction City housing development project, U.S. Attorney Lanny Welch said today.
A criminal information filed today in U.S. District Court in Topeka charges Freeman with one count of conspiracy to commit bank fraud, evade federal currency reporting requirements and interfere with interstate commerce, by extortion of a public official.
The government alleges that Freeman, a building contractor who lives in Lawrence, is a part-owner of Bid D Development LLC and Big D Construction. He also is a signatory on accounts for Tri-County Foundations, LLC; L and K Trucking LLC, and Big D LLC, as well as other accounts at Lawrence Bank in Lawrence, Kan.
In 2004, Junction City officials were expecting a large troop buildup at Fort Riley that they thought had the potential to double the city’s population. As a result, the city moved to annex 1,400 acres in hopes of enhancing the local housing market and expanding the local economy. Freeman traveled to Junction City to look into acquiring land where houses could be built. During this time, he became friends with a member of the Junction City Commission.
On May 1, 2006, Freeman issued a $5,000 check payable to the wife of the member of the Junction City Commission. The check was drawn on the account of Tri-County Foundations, LLC. On May 5, 2006, Freeman and partners formed Big D Development LLC and Big D Construction LLC. At that time, he bragged to his partners that he had a member of the Junction City Commission in his pocket and he could get anything he wanted from the City Commission. On July 6, 2006, Freeman issued a check made payable to the member of the Junction City Commission. The check was drawn on an account of L and K Trucking.
On July 27, 2006, Freeman’s company, Big D, received a development contract for Sutter Woods Subdivision in Junction City. On Aug. 30, 2006, Freeman’s company, Big D, received a development contract for Sutter Highlands Subdivision. The two contracts had a total value to Freeman’s Company of more than $12 million.
After the City Commission awarded the Sutter Wood development contract to Big D, the company set aside a choice lot for a residential home for “Firefighter,” which was a code name for the member of the Junction City Commission.
On March 2007, Freeman directed an assistant to draw and cash a check for $9,000 and deliver the cash to the member of the Junction City Commission during a meeting at a rest stop between Topeka and Junction City. Freeman instructed the assistant to draw and cash checks for amounts less than $10,000 in order to avoid having to file a currency transaction report required by the U.S. Bank Secrecy Act.
If convicted, Freeman faces a maximum penalty of 30 years, a fine up to $1 million and forfeiture. The government also is seeking a judgment against Freeman for the proceeds of the crime, including cash and property. The Federal Bureau of Investigation and the Internal Revenue Service/Criminal Investigation Division worked on the case. Assistant U.S. Attorneys Richard Hathaway and Christine Kenney are prosecuting.
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