Raytown Landlord Sentenced for Bankruptcy Fraud
KANSAS CITY, Mo. – A Raytown, Mo., man has been sentenced in federal court 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, 68, of Raytown, was sentenced by U.S. District Judge Brian C. Wimes on Thursday, March 22, 2018, to five years of probation. The court also ordered Mabrie to pay $92,040 in restitution.
On Sept. 14, 2017, Mabrie pleaded guilty to one count of aiding and abetting bankruptcy fraud.
Mabrie was an intercity landlord who did not pay his Jackson County property taxes nor the city assessments on the properties he owns and rents. When the properties went into foreclosure by Jackson County in 2009 and again in 2011, Mabrie filed a Chapter 13 bankruptcy proceeding shortly before the sale of the properties at the annual August auction. The bankruptcy petitions were soon dismissed for failure to file required information, but prevented the foreclosure and Mabrie continued to collect rent from the properties (including money from the Housing Choice Voucher (HCV) program, also known as the Section 8 tenant-based assistance program).
According to court documents, Mabrie’s conduct had a broader negative impact on the community. In a letter to the court, the Director of Neighborhood Housing Services for the City of Kansas City, Mo., stated that “Kenneth Mabrie, and his associated limited liability companies and business entities, have failed to maintain their properties for many years. His failure to maintain its properties has resulted in both a quantifiable monetary loss to taxpayers and pervasive blight throughout the city.”
Co-defendant Curtis Jones, 55, of Kansas City, Mo., also pleaded guilty to his role in the scheme and was sentenced to three years of probation.
Jones filed for bankruptcy on Aug. 22, 2012, five days before the date of the auction sale. Jones listed 31 tax delinquent properties in his bankruptcy petition. Jones was deeded 17 of those properties from Mabrie one day prior to the filing. Seven of those properties were included in Mabrie’s 2011 bankruptcy petition. An additional two properties listed by Jones were privately owned by Mabrie at the time of the filing. The remaining 12 properties were deeded to Jones one day prior to filing from other persons. The majority of the remaining 12 properties had some sort of nexus to Mabrie; for example, of the remaining 12 properties, Mabrie owned 10 of the properties previously, and one of the properties was deeded from Mabrie’s daughter. Jones’s bankruptcy petition was dismissed on Sept. 7, 2012, for failure to file information.
Jones filed for bankruptcy again on Aug. 23, 2013, the same day of the auction sale. Jones listed 29 tax delinquent properties in his bankruptcy petition. Two of those properties were deeded from Mabrie on the day of the filing and 26 of the properties had been included in the 2012 petition. This bankruptcy petition was dismissed on Sept. 13, 2013, for failure to file information.
The loss amount to Jackson County was $92,040, for which the court ordered Mabrie to pay restitution. This represents only the most recent tax bill as included in the bankruptcy filings (2010 or 2011 or 2012), less any money Mabrie or Jones paid to Jackson County following the bankruptcy filings (as of September 2015).
This case was 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.