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Justice News

Department of Justice
U.S. Attorney’s Office
District of Kansas

FOR IMMEDIATE RELEASE
Wednesday, June 27, 2018

Indictment: Developer of Oread Hotel Collected $400,000+ in Fraudulent Tax Refunds

TOPEKA, KAN. – The developer of the Oread Hotel and his bookkeeper were indicted Wednesday on federal charges of scheming to collect more than $400,000 in fraudulent tax refunds from the City of Lawrence.

Thomas S. Fritzel, 52, Lawrence, Kan., and Keela Lam, 46, Lawrence, Kan., are charged with one count of conspiracy to defraud the city and one count of interstate transportation of stolen funds. Also named as defendants are companies controlled by Fritzel including Oread Construction LC, Oread Wholesale LC, Oread Inn LC and R6 LC.

The indictment alleges that in 2008 Fritzel signed an agreement with the City of Lawrence to develop the Oread Hotel in Lawrence, a seven-story hotel with restaurants, bars and a gift shop.

 

The city set up a Tax Increment Financing District and a Transportation Development District around the hotel and agreed to reimburse Fritzel for his development costs. The funds to pay Fritzel were to come from property tax and sales taxes collected inside the redevelopment district.

The indictment alleges Fritzel and Lam conspired to defraud the city by seeking reimbursement for hundreds of transactions that were not generated within the redevelopment district. The indictment alleges the defendants fraudulently sought refunds for taxes paid on furniture and appliances, work on houses Fritzel owned in Lawrence and Colorado, landscaping materials, party tent rentals, car batteries, equipment for a car wash and other items.

A separate indictment alleges Fritzel and others violated the requirements of the Clean Air Act for disposal of asbestos.

The indictment charges Fritzel, Casey Stewart, 38, Lawrence, Kan., Wesley Lynch, 60, Lawrence, Kan. and Tucker Fritzel, 25, Lawrence, Kan., with one count of conspiracy (count one), one count of failing to notify the Environmental Protection Agency of the removal of asbestos materials (count two), one count of failing to wet materials that contained asbestos during demolition (count three) and one count of failing to dispose of asbestos waste in leak-tight containers (count four).

Also named as defendants in the second indictment are DFC Company of Lawrence, LC; Eagle 1968, LC of Lawrence and R&R Supply Company, LC of Lawrence.

 

The indictment alleges the defendants conspired with Fritzel to violate federal laws for handling asbestos in order for Fritzel to save money on demolition and renovations at the Alvamar Country Club in Lawrence.

In the first indictment, upon conviction, the defendants face up to five years in federal prison and a fine up to $250,000 on the conspiracy count, and up to 10 years and a fine up to $250,000 on the count charging interstate transportation of stolen funds.

In the second indictment, upon conviction, the defendants face up to five years in federal prison and a fine up to $250,000 on count one, up to two years and a fine up to $250,000 on count two and up to five years and a fine up to $250,000 on counts three and four.

The FBI and the Lawrence Police Department investigated the Oread Hotel indictment. The Environmental Protection Agency – Criminal Investigation Division investigated the other indictment. Assistant U.S. Attorney Richard Hathaway is prosecuting both cases.

 

OTHER INDICTMENTS

 

Alan J. Haag, 53, Wichita, Kan., is charged with unlawful possession of a firearm following a felony conviction. The crime is alleged to have occurred June 13, 2018, in Sedgwick County, Kan.

If convicted he faces up to 10 years in federal prison and a fine up to $250,000. The FBI investigated. Assistant U.S. Attorney David Lind is prosecuting.

Kasey A. Haag, 25, Wichita, Kan., is charged with unlawful possession of a firearm following a felony conviction. The crime is alleged to have occurred June 13, 2018, in Sedgwick County, Kan.

If convicted he faces up to 10 years in federal prison and a fine up to $250,000. The FBI investigated. Assistant U.S. Attorney David Lind is prosecuting.

Anthony Hervey, 36, is charged with unlawful possession of a firearm following a felony conviction. The crime is alleged to have occurred June 13, 2018, in Sedgwick County, Kan.

If convicted he faces up to 10 years in federal prison and a fine up to $250,000. The FBI investigated. Assistant U.S. Attorney David Lind is prosecuting.

In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.

 

Topic(s): 
Financial Fraud
Component(s): 
Updated June 27, 2018