Management Firm Owner Admits to Stealing Over $2.5 Million from Client Homeowner and Condo Associations
Used the Stolen Funds for Personal and Business Benefits, Such as Dog Grooming, Adult Entertainment, Clothing and Payroll for His Employees
Baltimore, Maryland – William Kyndall Francis, age 39, of Elkridge, Maryland pleaded guilty today to wire fraud.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation, Baltimore Field Office.
Francis owned and operated Legacy Investment and Management, Inc. (Legacy Inc.) and Legacy Investment and Management, LLC (Legacy LLC), which were both located at 10015 Old Columbia Rd. in Columbia, Maryland. Legacy Inc. and Legacy LLC (collectively Legacy) were both management firms that provided financial and property services primarily to homeowner and condominium associations (HOAs) in Maryland, Washington D.C. and Virginia in exchange for a monthly fee. One of the services that Legacy provided was management of the HOAs’ reserve funds, which were typically held in savings or money market accounts and were to be used to cover long term and unexpected capital expenses.
According to his plea agreement, from October 2011 to August 2012, Francis defrauded at least 51 of Legacy’s HOA clients by taking reserve funds that belonged to the HOAs. For many of the HOAs, Francis created false bank statements that he gave to the HOA representatives that falsely reflected that their reserve funds were intact and earning returns. In fact, Francis had spent the funds for his own personal and business benefit, including: $7,165.70 to Dogtopia, a dog grooming service; $2,339 to Delicate Touch Nails, a nail salon; $8,244.42 to the Washington Wizards; $1,000.01 to Bare Exposure and $3,848.67 to Pure Gold, adult entertainment clubs; $2,088.50 to A Platinum Plus Limousines; $3,700 to Shadow Room, a Washington D.C. night club; thousands of dollars for the purchase of clothing, liquor, restaurant meals, groceries and other living expenses; $40,025.07 for payroll for Legacy Inc. employees; and payment to AT&T.
The total loss caused by the fraudulent scheme was at least $2,573,753.92. Francis has agreed to the entry of a money judgment forfeiting $2.5 million.
Francis faces a maximum sentence of 20 years in prison and a fine of $250,000 for wire fraud. U.S. District Judge Ellen L. Hollander scheduled his sentencing for September 13, 2016, at 10:00 a.m.
Today’s announcement is part of the efforts undertaken in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
United States Attorney Rod J. Rosenstein commended the FBI for its work in the investigation and thanked Assistant U.S. Attorney Kathleen O. Gavin, who is prosecuting the case.