Former Owner of Montana Area Chili's Pleads Guilty to Bank Fraud
GREAT FALLS – Kenneth James Hatzenbeller, 52, of Great Falls, Montana, pleaded guilty to bank fraud today in U.S. District Court. He faces a maximum prison sentence of 30 years imprisonment and a $1 million fine. Hatzenbeller also agreed to pay at least $1,077,866 in restitution. U.S. District Court Judge Brian M. Morris presided over the change of plea and set sentencing for May 18, 2017 in Great Falls.
In court documents, federal prosecutor Chad Spraker stated that if called upon to prove its case at trial, the United States was prepared to demonstrate that in August of 2014, Hatzenbeller contacted Zions Bank and requested a $500,000 loan to purchase furniture, fixtures, and equipment for five Chili's restaurants operated by Shoot the Moon. The collateral for the loan was to be the furniture, fixtures, and equipment purchased with the loan proceeds. Hatzenbeller signed a collateral agreement acknowledging that fact.
On September 2, 2014, Hatzenbeller signed a Disbursement Request and Authorization requesting that $500,000.00 in loan proceeds be disbursed to Penner Brokerage. That same day, the Bank initiated a wire transfer of $494,890 to Wells Fargo for the benefit of Penner Brokerage based on invoices listing Penner Brokerage as the vendor for various furniture, fixtures, and equipment in that total amount. The account number identified as belonging to Penner Brokerage was in fact an account controlled by Hatzenbeller’s daughter who knew nothing of Penner Brokerage or the invoices until interviewed by the FBI. Hatzenbeller’s daughter indicated her father had asked to use her account to accept bank funds and then transfer those funds to him. The funds were never used for furniture, fixtures and equipment and were redirected to other company debts leaving Zions uncollateralized and unsecured.
Shoot the Moon filed for a Chapter 11 bankruptcy with the United States Bankruptcy Court in October of 2015. Hatzenbeller was deposed in the bankruptcy proceeding. When questioned about the $490,000 deposit into Shoot the Moon’s account, he claimed it was a loan from his daughter and her husband, which Hatzenbeller used to pay Shoot the Moon’s general expenses.
This case was prosecuted by Assistant U.S. Attorney Chad C. Spraker and investigated by the Federal Bureau of Investigation and the United States Trustee.