Kingsville Couple Plead Guilty to $567,000 Bank Fraud for Lee's Summit Construction Project

 

KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kingsville, Mo., husband and wife pleaded guilty in federal court today to a $567,000 bank fraud scheme related to his work on a Lee’s Summit, Mo., subdivision.

Dennis R. Key, 51, and his wife, Michal Ann Key, 49, both of Kingsville, pleaded guilty in separate appearances before U.S. Chief District Judge Greg Kays to bank fraud.

By pleading guilty today, the Keys admitted that they engaged in a bank fraud scheme from August 2006 to November 2009 in which they stole as much as $567,767. Dennis Key is the owner of DM & Associates, LLC, a land surveying and engineering consulting business in the Kansas City area. Michael Key did administrative and clerical work for the business, including bookkeeping, paying bills and writing checks.

On Jan. 17, 2005, Dennis Key entered into an employment agreement with Burkart Enterprises, Inc., to provide construction management services for a subdivision in Lee’s Summit for which he would be paid $35,000. On Feb. 2, 2005, Dennis Key entered into another employment agreement with Burkart to be a builder’s representative for the construction of a house in Lee’s Summit, for which he would be paid $100,000.

In August 2006, Dennis Key arranged for JM Contractors to act as general contractor for the construction work and to subcontract work to be performed. He instructed JM Contractors to add an extra five percent to its fee, which would be paid to Dennis Key. Dennis Key also instructed JM Contractors that its fee and the additional fees were not to be identified on the bills submitted by the company, but rather were to be added into each line item on the bills.

The Keys also prepared false, inflated bills and invoices in the names of Contracting Services and Mid America Construction, which were actually shell companies they created. They presented the inflated bills and invoices to Burkart, representing that the bills and invoices were for services rendered. Burkart reviewed the false, inflated bills and invoices, and, believing the payments were to entities that had performed the work stated, wrote checks for the amounts presented then gave the checks to the Keys.

Dennis Key arranged with BKB Concrete and Construction to perform work on the project, instructing the owner of BKB Concrete and Construction to submit all bills to him. On Aug. 18, 2008, Michal Key opened a business checking account in his name DBA BKB Concrete. This name was intentionally similar to and sounded like the name “BKB Concrete and Construction.” When they received BKB Concrete and Construction bills, the Keys prepared false, inflated bills for the services in the name BKB Concrete and submitted the inflated bills to Burkart rather than the true bills for the services rendered. Burkart reviewed the inflated bills and, believing the payments were to the entity that had performed the work, wrote checks for the amounts presented to him and gave the checks to the Keys. They deposited the checks into their BKB Concrete account then transferred some of the funds to their DM & Associates bank account in order to pay the bills from BKB Concrete and Construction.

Dennis Key obtained other subcontractors and entities to perform work on the property and instructed the subcontractors to submit their bills to him. When the Keys received bills from other subcontractors and entities they prepared false and inflated bills and submitted false, inflated invoices to Burkart, representing that the bills were for the services rendered. Burkart reviewed the inflated bills and, believing the payments were to the entity that had performed the work, wrote checks for the amounts presented then gave the checks to the Keys.

Under federal statutes, the Keys are each subject to a sentence of up to 30 years in federal prison without parole, plus a fine up to $1 million and an order of restitution. Sentencing hearings will be scheduled after the completion of presentence investigations by the United States Probation Office.

This case is being prosecuted by Assistant U.S. Attorney Linda Parker Marshall. It was investigated by the U.S. Secret Service and the Lee’s Summit, Mo., Police Department.