IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF KANSAS

(TOPEKA DOCKET)

UNITED STATES OF AMERICA,    )

                                                             )

                              Plaintiff,                )

                                                             )

                    vs.                                    )        Case No. 06-40151-Crow

                                                             )

                                                             )        Ct. 1:            18 U.S.C. 371

F. JEFFREY MILLER                         )        Cts. 2 & 3:    18 U.S.C. 1344

STEPHEN W. VANATTA                  )        Cts. 4 & 5: 18 U.S.C. 1957

HALLIE IRVIN,   and                         )        Ct. 6: 18 U.S.C. 1519

JAMES SPARKS                                 )        Ct. 7: 18 U.S.C. 1512

                              Defendants.           )        Cts. 8 - 11: 18 U.S.C. 401

______________________________  )        Ct. 12: Forfeiture

INDICTMENT

          THE GRAND JURY CHARGES:

Introduction

          At all times material to this indictment:

          1) F. Jeffrey Miller (hereinafter “MILLER”) was a building contractor involved in residential construction in Kansas, Missouri and other states. MILLER sold homes under the name of Miller Enterprises, Star Land Development, Somerset Homes, Dutch Custom Homes and other companies.

          2) On May 17, 2006, MILLER, along with eight other individuals associated with him in residential real estate construction and sales, were indicted by a federal grand jury in United States District Court in case number 06-40068. Included among the charges was conspiracy to commit bank fraud and money-laundering in violation of Title 18 United States Code, Sections 2, 371, 1344 and 1957. There is also a forfeiture count seeking forfeiture in excess of $25,000,000 in fraud proceeds. Included among the allegations of this indictment were that MILLER and his co-defendants targeted home-buyers with poor credit, obtained inflated appraisals, submitted false information to federally insured financial institutions to secure financing for homes, manipulated home-buyers to move into homes prior to closing, then increased the purchase price for homes at closing, using the threat of eviction and loss of the sale to get home-buyers to agree to close on a property for more than they had originally agreed to pay.

          3) On or about June 12, 2006, prosecutors handling this case were contacted by James Wyrsch, a Kansas City attorney, retained to represent MILLER, inquiring what the government’s position concerning bond would be. The prosecutors indicated that in order for the government to agree to any conditions of release pending trial in the matter, MILLER would have to agree to conduct his business under a monitoring agreement.

          4) MILLER agreed to have his business monitored by Meara King & Company of Kansas City, to ensure that all transactions were conducted “in the ordinary course of business” including, but not limited to the requirement that “all facts relating to the transactions have been accurately disclosed to all parties to the transaction.”

          5) On June 27, 2006, MILLER made his first appearance before Judge Sebelius. Sebelius entered an order releasing MILLER on his own recognizance with the agreement, among other things that he would conduct his business transactions under the Monitoring Agreement that he entered into with Meara King and Company, and would not commit any violation of federal, state or local law while on release.

          6) On June 27, 2006, MILLER signed the Order Setting Conditions of Release acknowledging a violation of the conditions of release could subject him to a revocation of his release, an order of detention, and a prosecution for contempt of court pursuant to Title 18 United States Code, Section 401, with reference to Section 3148(c). MILLER signed this Order of the federal court full well knowing that he had been continuing his criminal conduct, and would continue his criminal conduct with a new conspiracy which he had entered with Stephen Vanatta (hereinafter “VANATTA”), Hallie Irvin (hereinafter “IRVIN”), James Sparks (hereinafter “SPARKS”), and others. MILLER, VANATTA and IRVIN resided in the state of Kansas, but as overt acts in the conspiracy, as alleged herein, would commit overt acts of moving in interstate commerce in execution of the conspiracy.

          7) As an inducement and overt act to get VANATTA and IRVIN to continue to cooperate in the conspiracy, MILLER agreed to cosign a note to allow the Vanettas to acquire a property at 415 Regency Cove, Lake Ozark, Missouri, the proceeds of which MILLER had a verbal agreement with VANATTA and IRVIN to use at least in part to purchase from him a 1998, 45 foot Sea Ray boat, VIN - Hull I.D. #SERP4077D898, known as the “Bling Bling.”

          8) MILLER, VANATTA and IRVIN also full well knew that because of the substantial proceeds of the loan being sought from First National Bank, Lake Ozark, Missouri, VANATTA and IRVIN would have to show substantial assets and income. Because VANATTA and IRVIN full well knew that they could not provide any legitimate history of substantial assets and income, they created and presented to the bank false, fictitious and fraudulent documentation in support of the loan including a financial statement and a tax return.

          9) First National Bank, Lake Ozark, Missouri, and First Tennessee Bank, Memphis, Tennessee, are federally insured financial institutions as that term is defined by Title 18 United States Code, Section 20 and Title 31 United States Code, Section 5312(a)(2). It is a federal felony crime to knowingly execute, and attempt to execute a scheme or artifice to defraud a financial institution or obtain any of the moneys, funds, credits, assets, securities and other property owned by or under the custody and control of a financial institution by means of false and fraudulent, pretenses representations or promises. Such an act constitutes a violation of Title 18 United States Code, Section 1344, and is deemed a “specified unlawful activity” under the money-laundering statutes. See Title 18 United States Code, Section 1957, with reference to Section 1956(c)(6) & 1961(1).

          10) MILLER, VANATTA, & IRVIN ran an office at 10777 Barkley, in Overland Park, Kansas, from which numerous overt acts were committed in furtherance of the conspiracy alleged herein. It was from this office that these defendants and coconspirators marketed homes selling under the names Miller Enterprises, Dutch Custom Homes, Star Land Development and Somerset Homes. Further, it was from this office that these defendants and coconspirators created advertisements soliciting home-buyers with credit problems, promising to put them into homes with no money down and builder-financing. From this office the defendants fielded calls and contacts from prospective home-buyers, obtained credit information, prepared preliminary loan application information and maintained the business records for sales transactions, including sales contracts and false rent verification documents, which the defendants called “friend letters”.

          11) Also at this office at 10777 Barkley, in Overland Park, Kansas, the defendants and coconspirators maintained what were ostensibly business records but which also constituted evidence of their commission of crimes. These records included evidence of their criminal conduct, including the fact that the defendants unilaterally increased the sales price on homes before closing, forged buyers’ signatures and caused buyers to obtain “friend letters”, which would falsely create such things as, for example, a rent history for buyers that was not actually true. These friends letters were obtained by the defendants and coconspirators for the express purpose of qualifying individuals for loans from federally insured institutions, who would not otherwise have qualified for these loans.

          12) MILLER, VANATTA and IRVIN, employed one Sandra Joy Harris, a.k.a. Sam Harris, at 10777 Barkley, in Overland Park, Kansas to perform various functions in respect to the transactions being conducted at that location, including maintaining the buyer files for the various home sale transaction being undertaken there. Prior to August 23, 2006, Harris advised agents of the federal government, investigating MILLER’s continuing illegal activity, that such “friend letters” were contained in buyer files located in the Overland Park office at 10777 Barkley.

          13) On or about August 23, 2006, federal agents obtained and served a grand jury subpoena for the buyer files on Harris to obtain evidence as part of an ongoing grand jury investigation. Upon receipt of the grand jury subpoena, Harris contacted VANATTA to advise him of the subpoena and what was being sought by the grand jury and that she would be coming to the office to retrieve these records in compliance with the subpoena. When Harris got to the office at 10777 Barkley, in Overland Park, Kansas, the files had been sanitized by the removal of incriminating evidence.

          14) Destruction of records pertaining to a federal grand jury investigation is a violation of Title 18 United States Code, section 1519. Using intimidation, threats and corruptly persuading another person, or attempting to do so, with the intent cause or induce a person to withhold testimony and withhold a record, document, or other object, from an official proceeding is a violation of Title 18 United States Code, section 1512(b)(2)(A).

          15) SPARKS was a loan broker in the greater Kansas City area, to whom MILLER, VANATTA and IRVIN referred home buyers, and who collaborated with MILLER, VANATTA and IRVIN by knowingly preparing and submitting false financial information in respect to prospective home buyers to defraud federally insured financial institutions. SPARKS also paid kickbacks to IRVIN on behalf of VANATTA of 40% of loan closings to maintain business with Miller Enterprises, provided down payments to home buyers, referred falsified and inflated sales contracts to appraisers selected by VANATTA, that SPARKS knew would inflate appraisals to cover the altered sales price, and shred and deleted incriminating documentation maintained in SPARKS’ office at the direction of VANATTA. On or about November 7, 2006, MILLER, VANATTA and IRVIN, learned that SPARKS had been cooperating with agents from federal investigative agencies of the United States.

COUNT 1

A VIOLATION OF TITLE 18, UNITED STATES CODE, SECTION 371

THE CONSPIRACY:

          16) Paragraphs 1 through 15 are incorporated herein by reference.

          17) Beginning in sometime in 2004, the precise date being unknown to the grand jury, and continuing through the return of the indictment, the defendants herein,

F. JEFFREY MILLER

STEPHEN VANATTA

HALLIE IRVIN and

JAMES SPARKS

combined, conspired, confederated and agreed to commit offenses against the United States of America, in the District of Kansas and elsewhere, by:

A) knowingly executing, and attempting to execute, a scheme and artifice to defraud financial institutions and obtain any of the moneys, funds, credits, assets, securities and other property owned by and under the custody and control of financial institutions, by means of material false and fraudulent pretenses, representations, promises and omissions of fact, in violation of Title 18 United States Code, Sections 2, and 1344;

B) knowingly, wilfully and unlawfully engaging in monetary transactions in property derived from specified unlawful activity, in violation of Title 18 United States Code, Sections 2 & 1957;

C) knowingly, wilfully and unlawfully disobeying and resisting a lawful writ, process, order, rule, decree and command, in violation of Title 18 United States Code, Sections 2 & 401, with reference to Title 18 United States Code, Section 1348©;

D) knowingly, wilfully and unlawfully destroying documents with the intent to impede, obstruct and influence the investigation and proper administration of a matter within the jurisdiction of an agency of the United States, in violation of Title 18 United States Code, Section 1519.

E) knowingly, wilfully and unlawfully using intimidation, threats and corrupt persuasion of another person, and attempting so to do with the intent to cause and induce a person to withhold testimony and withhold a record, document, and other object, from an official proceeding in violation of Title 18 United States Code, section 1512(b)(2)(A).

          18) In furtherance and execution of this conspiracy, the defendants and others at their direction, committed overt acts including, but not limited to, those set forth in paragraphs 1 through 15 above, and the substantive crimes in Counts 2 through 11, which follow, all being incorporated herein by reference.

COUNTS 2 & 3

BANK FRAUD

A VIOLATION OF TITLE 18, UNITED STATES CODE, SECTIONS 2 & 1344

          19) Paragraphs 1 through 18 are incorporated herein as though fully set forth.

          20) On or about the dates set forth below, in the District of Kansas and elsewhere, the defendants,

F. JEFFREY MILLER

STEPHEN VANATTA

HALLIE IRVIN and

JAMES SPARKS

knowingly executed, and attempted to execute, a scheme and artifice to defraud the financial institutions identified below, as defined in 18 U.S.C. § 20, and to obtain the moneys, funds, credits, assets, securities, and other property, owned by or under the custody or control of these institutions, by means of false and fraudulent pretenses, representations, promises and omissions of material facts, thereby obtaining, and attempting to obtain, loan proceeds from the following financial institutions:

COUNTS 4 & 5

ENGAGING IN MONETARY TRANSACTIONS

IN PROPERTY DERIVED FROM SPECIFIED UNLAWFUL ACTIVITY

IN VIOLATION OF TITLE 18, UNITED STATES CODE, SECTIONS 2 & 1957

21)Paragraphs 1 through 20 are incorporated herein by reference.

          22) On or about the dates set forth below, in the District of Kansas and elsewhere, the defendants,

F. JEFFREY MILLER

STEPHEN VANATTA

HALLIE IRVIN and

JAMES SPARKS

knowingly and wilfully engaged and attempted to engage in monetary transactions affecting interstate or foreign commerce, in criminally derived property of a value greater than $10,000, such property having been derived from the specified unlawful activity of bank fraud, in violation of Title 18, United States Code, Section 1344, as follows:

COUNT 6

DESTRUCTION OF RECORDS IN A FEDERAL INVESTIGATION

IN VIOLATION OF TITLE 18, UNITED STATES CODE, SECTIONS 2 & 1519

          23) Paragraphs 1 through 22 are incorporated herein by reference.

          24) In or about August of 2006, in the District of Kansas, the defendants,

F. JEFFREY MILLER

STEPHEN VANATTA

HALLIE IRVIN, and

JAMES SPARKS

knowingly, wilfully and unlawfully destroyed and concealed original sales contracts and “friend letters” with the intent to impede, obstruct, and influence the investigation of federal law violations, matters within the jurisdiction of the Internal Revenue Service, Criminal Investigation Division, and the Housing and Urban Development Office of Inspector General, agencies and departments of the United States, who were jointly investigating the defendants on behalf of the grand jury for the federal district of Kansas.

COUNT 7

CORRUPTLY INFLUENCING AND ATTEMPTING TO INFLUENCE A WITNESS, IN VIOLATION OF TITLE 18, UNITED STATES CODE, SECTIONS 2 & 1512

          25) Paragraphs 1 through 24 are incorporated herein by reference.

          26) In or about November of 2006, in the District of Kansas, the defendants,

F. JEFFREY MILLER

STEPHEN VANATTA

HALLIE IRVIN

knowingly, wilfully and unlawfully used intimidation, threats and corrupt persuasion of James Sparks, with the intent to cause and induce James Sparks to withhold testimony and withhold records and documents from an official proceeding, a grand jury investigation in a violation of Title 18 United States Code, section 1512(b)(2)(A).

COUNTS 8, 9, 10 & 11

CRIMINAL CONTEMPT

IN VIOLATION OF TITLE 18, UNITED STATES CODE, SECTIONS 2 & 401 WITH REFERENCE TO TITLE 18 UNITED STATES CODE, SECTION 1348(c)

           27) Paragraphs 1 through 26 are incorporated herein by reference.

          28) On or about the dates set forth below, in the District of Kansas and elsewhere, the defendants,

F. JEFFREY MILLER

STEPHEN VANATTA

HALLIE IRVIN and

JAMES SPARKS

knowingly, wilfully and unlawfully disobeyed and resisted a lawful writ, process, order, rule, decree and command, that is the June 27, 2006, Order Setting Conditions of Release, signed by Judge Sebelius, on the following dates in the following manner:

                                                      COUNT 12

FORFEITURE

          30) Paragraphs 1 through 28, and the allegations of the foregoing counts of this indictment, are realleged, and by this reference fully incorporated herein, for the purpose of alleging forfeitures to the United States of America, pursuant to the provisions of Title 18 United States Code, Section 982(a)(2).

          26) As a result of the conspiracy, and scheme alleged in the foregoing counts, involving the substantive offenses of bank fraud in violation of Title 18 United States Code, Section 1344, and money-laundering, in violation of Title 18 United States Code, Section 1957, the defendants

F. JEFFREY MILLER

STEPHEN VANATTA

HALLIE IRVIN and

JAMES SPARKS

shall forfeit to the United States all property, real and personal, involved in and derived from the aforesaid offenses and all property traceable to such property, or proceeds, including, but not limited to:

          A) the sum in excess of $5,000,000.

          B) all assets and accounts whatsoever of Miller Enterprises, Star Land Development, Somerset Homes, Dutch Custom Homes, HCI, Innovative Designs, and any other entities however organized, which the defendants MILLER, VANATTA, IRVIN or SPARKS, own or control or over which they have signature or signatory authority.

          C) A residence at 415 Regency Cove, Lake Ozark, Missouri, and/or any proceeds or property derived from divestiture of this property.

          D) 1998, 45 foot Sea Ray boat, VIN - Hull I.D. #SERP4077D898, known as the “Bling Bling”.

          E) A 2006, 50+ foot Sea Ray boat , Hull I.D. #SERY1272D506, known as “Pipe Dream.”

          F) A 1998 Piper Seneca V Aircraft, serial No. 34-49073, Reg. No. N4129N

          G) In the event any of the foregoing property: i) cannot be located upon the exercise of due diligence; ii) is transferred, sold to, or deposited with, a third party; iii) is placed beyond the jurisdiction of the Court; iv) is substantially diminished in value; or, v) is commingled with other property which cannot be divided without difficulty, as a result of any act or omission of any defendant, the Court shall order the forfeiture of any other property of the defendants, up to the value of the property described in the foregoing paragraphs.

                                                                        A TRUE BILL.

     DATE                                                         FOREMAN OF THE GRAND JURY

ASSISTANT UNITED STATES ATTORNEY

District of Kansas

[It is requested that trial be held in Topeka, Kansas]

The Court acknowledges the receipt of this indictment in open court.

UNITED STATES DISTRICT JUDGE