Raytown, KC Men Indicted For Bankruptcy Fraud
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Raytown, Mo., man and a Kansas City, Mo., man have been indicted by a federal grand jury for engaging in a bankruptcy fraud scheme in order to prevent dozens of rental properties from being sold by the county for failure to pay property taxes.
Kenneth Mabrie, 66, of Raytown, and Curtis Jones, 53, of Kansas City, were charged in a five-count indictment returned under seal by a federal grand jury in Kansas City, Mo., on Wednesday, July 20, 2016. That indictment was unsealed and made public today upon the arrests and initial court appearances of Mabrie and Jones.
According to the indictment, Mabrie and Jones failed to pay Jackson County property taxes on approximately 37 rental properties they owned in Kansas City, Mo. They filed for bankruptcy protection on the day of, or a few days before the properties were scheduled to be sold by the county at auction, the indictment says, which prevented the sale. Their bankruptcy petitions were dismissed shortly thereafter. The total delinquent county property tax due and owing by Mabrie and Jones on the properties listed in the bankruptcy petitions was $173,640.
The indictment charges Mabrie with one count of bankruptcy fraud and charges Mabrie and Jones together in five additional counts of bankruptcy fraud.
Mabrie failed to pay Jackson County property taxes on at least 23 rental properties he owned in Kansas City from 2006 through 2013, the indictment says. The properties would go into foreclosure and be scheduled to be sold by the county via auction, a process that takes four years.
Mabrie filed a bankruptcy petition in 2011 listing eight tax delinquent properties, five days prior to the auction sale. The bankruptcy petition prevented the sale of the properties by Jackson County. Shortly thereafter, the indictment says, the bankruptcy petition was dismissed for failure to file necessary information.
Jones filed a bankruptcy petition in 2012 listing 31 tax delinquent properties, five days prior to the auction sale. Seventeen of the properties were deeded from Mabrie one day prior to the bankruptcy filing. Seven of the properties were included in the petition filed by Mabrie in 2011. Two other properties were actually owned by Holman Investments, LLC, a Mabrie business, at the time of the filing. The bankruptcy petition prevented the sale of the properties by Jackson County. Shortly thereafter, the bankruptcy petition was dismissed for failure to file necessary information.
Jones filed a bankruptcy petition in 2013 listing 29 tax delinquent properties, on the same day as the auction sale. Two of the properties were deeded from Mabrie on the same day as the bankruptcy filing. Twenty-six of the properties had been included in the 2012 petition. The bankruptcy petition prevented the sale of the properties by Jackson County. Shortly thereafter, the bankruptcy petition was dismissed for failure to file necessary information.
Following the filing of the bankruptcy petitions, Mabrie continued to collect rent on the rental properties. Mabrie also continued to receive Housing Assistance Payments totaling $18,722 through the Housing Choice Voucher Program (HCVP), commonly referred to as “Section 8” tenants. This program is funded by the U.S. Department of Housing and Urban Development and administered by the Housing Authority of Kansas City, Mo.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Paul S. Becker. It was investigated by the FBI and the U.S. Department of Housing and Urban Development – Office of Inspector General.