kinloch, Missouri, fire protection district chief sentenced for federal fraud charges
St. Louis, MO – The Fire Chief for the Kinloch Fire Protection District, DARRAN KELLEY, was sentenced to 33 months in prison and ordered to pay $259,738 restitution. He was sentenced on charges involving his unauthorized use of more than $140,000 of District funds from January 2007 to January 11, 2013, as well as charges that he made false statements about his receipt of Social Security disability payments, which resulted in overpayments to him of approximately $120,000. Kelley has been the District Fire Chief since 2002.
According to court documents, the Kinloch Fire Protection District maintained a District banking account for the receipt and disbursement of District funds. From January 2007 through January 2013, the District received approximately $160,361 in tax revenues from St. Louis County, Missouri. The City of Kinloch also distributed city funds to the District's bank account for payroll and operations of the District. It was a part of Kelley's scheme that he made unauthorized cash withdrawals from the District's bank account for his own personal use, including for the purchase of various personal items and for gambling at several casinos in the St. Louis area, that were unrelated to the legitimate operations of the District. It was a further part of Kelley's scheme that he made unauthorized transfers of funds from the District's bank account to pay for charges on his own personal Mastercard credit card, which were unrelated to the legitimate operations of the District. Further, Kelley stole and embezzled a portion of the funds received by the District in June 2010 from the Federal Emergency Management Agency (FEMA), which awarded the District a grant to cover 95% of the $250,000 total cost of a fire engine. Additionally, Kelley stole and embezzled funds which were donated to the District by concerned citizens who made the donations to assist the District in paying for its operations.
While Kelley engaged in the theft and embezzlement of District funds, there were substantial outstanding bills from AmerenUE for electric service, American Water for water service, to AT&T for telephone and communications services, and to North Central County Fire Alarm System for dispatch services, radios and pagers. Many of these bills went unpaid as a result of his criminal conduct and some of the necessary services were reduced or cut off due to non-payment.
Beginning on August 15, 2000, Kelley began receiving monthly disability benefit payments through the Social Security Administration pursuant to his application for benefits relative to a personal medical condition. Following his initial application, and in order for the Social Security Administration to determine his continued eligibility for disability benefits, he was required to immediately report any work and income, and to periodically verify his continued disability and report any work on Continuing Disability Review Reports. Kelley failed to truthfully report his work for the Kinloch Fire Protection District, and his income from that work to the Social Security Administration. On July 26, 2011, Kelley made a false statement on his Continuing Disability Review Report by stating that he had not worked since April 1, 2006, the date of his last medical disability decision, when in fact, he had been working as the paid Chief of the Kinloch Fire Protection District during that period of time. Kelley was paid a salary of approximately $640 every two weeks until December, 2011.
Kelley, Ferguson, MO, pled guilty in July to three felony counts of wire fraud, one felony count of federal program theft and one felony count of making false statements. He appeared today for sentencing before United States District Judge Catherine D. Perry.
This case was investigated by the Federal Bureau of Investigation, the Social Security Administration Office of Inspector General and the St. Louis County Police Department. Assistant United States Attorney Hal Goldsmith handled the case for the U.S. Attorney's Office.