Kalispell man sentenced to prison for mineral lease fraud scheme; firearms possession
GREAT FALLS – A Kalispell man, previously convicted of a felony, was sentenced to more than 10 years in federal prison on Wednesday for illegally possessing firearms and for a multi-million dollar scheme to defraud investors who gave him money for oil and gas leases and art work, U.S. Attorney Kurt Alme said today.
U.S. District Judge Brian M. Morris sentenced John Kevin Moore, also known as Kevin Moore, 62, to a total of 10 years and five months in prison and to three years of supervised release. Judge Morris also ordered $2,222,817 restitution and a $1,926,725 forfeiture.
In the fraud case, a jury convicted Moore in an August 2018 trial on all 21 counts in an indictment, including 11 counts of wire fraud, nine counts of money laundering and one count of false statement to a federal agent. In the firearms case, Moore pleaded guilty in September 2018 to being a felon in possession of firearms.
“I want to thank Assistant U.S. Attorneys Ryan Weldon and Timothy Racicot, the FBI, IRS and the Montana Auditor’s Office for putting a stop to Moore’s wide-ranging pyramid scheme that could have continued for years and defrauded many more investors,” U.S. Attorney Alme said. “Potential investors and the public in general need to know that fraud schemes like this one are not uncommon in Montana and can ruin lives. We will continue to aggressively prosecute individuals like Moore who scheme to defraud unwitting investors,” Alme said.
“Kevin Moore operated a classic “Ponzi” scheme, gaining the trust of unwitting investors who suffered devastating financial losses,” said Supervisory Senior Resident Agent Rick Shelbourn, of the FBI’s Salt Lake City’s Field Office. “The FBI acknowledges our law enforcement partners and the cooperation of the tenacious victims who helped bring Moore to justice. The FBI aggressively investigates fraud schemes like these and urges the public to be aware of investment opportunities that make exaggerated earnings claims. The public should always exercise due diligence before investing their hard-earned money.”
"Honest and law abiding citizens are fed up with the likes of those who use deceit and fraud to line their pockets with other people’s money," said Steven Osborne, IRS Criminal Investigation, Special Agent in Charge, Denver Field Office. “The role of IRS Criminal Investigation becomes even more important in embezzlement and fraud cases due to the complex financial transactions that can take time to unravel. IRS Criminal Investigation is proud to bring our forensic accounting skills to this joint venture and help put a stop to this and other types of white collar crime."
Montana’s Commissioner of Securities and Insurance Matt Rosendale, whose office assisted with the fraud case, said, “We were pleased to be able to work with federal authorities to bring John Kevin Moore to justice. I’d like to thank our team at the State Auditor’s office, the U.S. Attorney’s Office, and everyone else for their diligent work in resolving this case.”
In the fraud case, prosecutors presented evidence that Moore set up two companies, Big Sky Mineral Resources, LLC, in 2014, and Glacier Gala, in 2012, and used them to solicit money from investors by purporting to buy oil and gas leases and to buy and sell lucrative art work. Instead, prosecutors presented evidence that Moore used investors’ money to pay off earlier investors and to pay for personal expenses, including payments on multi-million-dollar properties.
To convince investors to give him money and to provide a sense of comfort about their investments, Moore would reference his wealth and connections with influential people, prosecutors said.
Moore received from investors more than $2 million, based on false claims he made regarding the mining of oil and gas and minerals and the sale of art work, prosecutors said.
When seeking money through Big Sky Mineral Resources, Moore claimed the funds would be used to buy leases and for mining activities in Montana and Arizona and that there was little to no risk. The investment would result in large returns in a short time frame, ranging from 30 days to a few months.
Moore gave some investors in Big Sky Mineral Resources checks and instructed them not to cash the checks until a later date, prosecutors said. The checks bounced when various investors attempted to cash their checks.
When soliciting funds for Glacier Gala, Moore represented he could turn a profit by buying, flipping and storing high-end art. When he received investments for Glacier Gala, Moore kept the money, failed to provide the art as promised and failed to return the art in his possession.
Prosecutors also presented evidence that Moore funneled money from Big Sky Mineral Resources through Glacier Gala to make it look like the money originated from the sale of a painting, when in fact, the money came from investors in Big Sky Mineral Resources.
Moore returned some of the money to investors after they raised concerns about the legitimacy of Big Sky Mineral Resources. Other times, rather than return the money, Moore promised to repay investors through alternative means and then failed to do so.
The fraud scheme ran from about April 2013 until September 2016 in Great Falls and Kalispell.
In the firearms case, Moore, having been convicted in 2003 of mail fraud and barred from possessing firearms, possessed numerous firearms in Glasgow, Kalispell and elsewhere from about November 2015 until the spring of 2017.
In a recording with a confidential informant, Moore said, “I have about 200 guns hidden. They can’t touch me being in possession. They just can’t do it.” Moore then showed the informant the firearms, which law enforcement later identified and photographed. The firearms ranged from shotguns to semi-automatic rifles.
Assistant U.S. Attorneys Ryan Weldon and Timothy Racicot prosecuted the cases, which were investigated by the FBI, IRS and the Montana State Auditor.