former attorney indicted for $650,000 fraud schemes
KANSAS CITY, Mo. – David M. Ketchmark, Acting United States Attorney for the Western District of Missouri, announced that a former Jackson County, Mo., attorney was indicted by a federal grand jury today for stealing $649,379 in separate schemes to defraud three of his clients.
Harley Kent Desselle, 61, of Raytown, Mo., was charged in a six-count indictment returned by a federal grand jury in Kansas City, Mo.
At the time of the alleged fraud schemes, Desselle was an attorney in private practice and operated an investment company called New Century Investments. Desselle was suspended from the practice of law in December 2008 and disbarred by the Missouri Supreme Court in April 2009.
Porter Foundation Scheme
Desselle began managing the samandlindsey.org, Inc., bank account on September 27, 2007. Donations were made to the bank account for the purpose of building a children’s playground in memory of the children of Tina Porter, Sam and Lindsey, who had been kidnapped and murdered by their father.
At the time the foundation was established, the indictment says, Desselle told Tina Porter he would take care of everything on the account. He was the only person who could sign foundation checks. Porter asked Desselle, on numerous occasions, for bank statements and/or documents related to the account, the indictment says, but Desselle refused to produce documents and would not disclose the bank account information.
On Oct. 25, 2007, Desselle allegedly wrote a $12,000 check drawn on the foundation’s account and deposited it into his law firm trust account. Porter did not authorize the $12,000 check. On Oct. 29, 2007, Desselle allegedly wrote a $7,500 check drawn on the foundation’s account, made payable to New Century Investments and deposited into his New Century account. Porter was not aware of and did not authorize the $7,500 check.
When Porter learned of the $19,500 in misappropriations, the indictment says, she insisted that Desselle return the funds to the foundation’s account. According to the indictment, Desselle deposited two checks into the foundation account – a $19,500 check with “original investment” listed in the memo and a $2,238 check with “balance of investment with interest” listed in the memo. The $2,238 check actually came from legal fees earned by Desselle in his law practice and/or money borrowed from friends or family members, the indictment says, instead of interested earned on the account.
According to the indictment, Desselle referred Porter for counseling services that were provided by his sister. Desselle allegedly told Porter that the counseling services would be free of charge. During a counseling session, the indictment says, Porter noticed the counselor had a check ledger for the foundation; Porter was told that the counselor was writing a check to herself for the services she provided. After that incident, Porter discontinued all counseling sessions.
Desselle is charged with two counts of bank fraud related to this scheme.
Clifton Life Insurance Scheme
Nancy Clifton received $750,000 in life insurance proceeds in 1996 when her husband was killed in a motor vehicle accident. Desselle, a longtime friend of Clifton’s husband, allegedly offered to invest the life insurance proceeds for Clifton in New Century and promised her high yields on the investment.
According to the indictment, Desselle made “interest payments” on Clifton’s investments by creating false documents to lull her into believing she was receiving interest payments, when the funds actually came from Desselle’s law firm or from funds Desselle solicited from family members. One of those payments allegedly came from the samandlindsey.org, Inc., account. Desselle falsely represented to Nancy Clifton in 2006 and 2007 that her investments were valued at up to $616,874, when in fact he lost all of her money between 1998 and 2000.
When Clifton read newspaper reports of Desselle’s handling of the Porter foundation account in 2008, she told Desselle to liquidate her investments as soon as possible. Desselle eventually admitted that her investments had all been lost, the indictment says.
Desselle is charged with two counts of wire fraud related to this scheme.
Nunez Bankruptcy Scheme
Desselle acted as the attorney for Christina Nunez in her bankruptcy filing in 2008. Nunez owned a motorcycle that would not have been exempt under bankruptcy law. According to the indictment, Desselle directed Nunez to sell the motorcycle and give him the proceeds, which she believed would be placed in the law firm’s trust account and used to pay down debt due her creditors. Nunez sold the motorcycle for $13,500, the indictment says; she kept $500 and gave the remaining $13,000 to Desselle.
On Oct. 13, 2008, Desselle filed Nunez’s bankruptcy. According to the indictment, the bankruptcy schedules submitted by Desselle on Nunez’s behalf did not include the $13,000 he received from Nunez for the sale of the motorcycle. Nunez testified at a bankruptcy hearing that she never reviewed the bankruptcy petition, the indictment says, and never signed the schedules.
Desselle is charged with one count of bankruptcy fraud and one count of making a false oath in a bankruptcy case in relation to this scheme.
Today’s indictment also contains a forfeiture allegation, which would require Desselle to forfeit to the government any property derived from the proceeds of the alleged offenses, including $348,794.
Ketchmark cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.This case is being prosecuted by Assistant U.S. Attorney Jane Pansing Brown. It was investigated by FBI and the U.S. Bankruptcy Trustee.