Payday Loan Company Owner Convicted of Bankruptcy Fraud | USAO-WDMO
KANSAS CITY, Mo. – A man from Mission Hills, Kansas was sentenced today in federal court for a bankruptcy fraud scheme related to his online payday loan company.
“It’s ironic that someone who has made a fortune lending money to others is trying to cheat their own creditors,” said Acting United States Attorney Teresa Moore. “This business owner engaged in a scheme of lies and deception for two years during his bankruptcy process by secretly holding assets instead of paying what he owed. The bankruptcy system relies on the honesty, openness and accuracy of debtors and, in return, gives those debtors a fresh start without debt. This defendant mocked the system in the hope that he could pay off over $ 7.5 million in debt while maintaining a luxurious lifestyle for himself.
Del Hodges Kimball, 54, was sentenced by U.S. District Judge Steven R. Bough to one year and one day in federal prison without parole. The court also ordered Kimball to pay $ 909,323 in restitution.
“This sentence should convince others that such behavior and actions will not be tolerated in the bankruptcy system,” said Acting United States Administrator Daniel J. Casamatta.
On January 19, 2021, Kimball pleaded guilty to one count of bankruptcy fraud. Kimball admitted he was engaged in a scheme to defraud the bankruptcy court by concealing assets, bank accounts and claims against third parties, and by making material misrepresentations and omissions regarding his assets and financial transfers to and from third parties.
Three of Kimball’s creditors filed for involuntary bankruptcy against Kimball, his partner, and their company, LTS, an online payday loan company based in Kansas City, on August 5, 2015. The claims of the three creditors have totaled over $ 15 million.
The US bankruptcy trustee filed a lawsuit denying Kimball’s discharge on March 10, 2017, and the bankruptcy court held a trial on January 11, 2018. After the trial, US bankruptcy judge Cynthia Norton ruled that Kimball had transferred property with the intention of hindering, delaying or defrauding creditors, made numerous false oaths in connection with this bankruptcy case and concealed property from the bankruptcy estate. He did not disclose his assets until he was arrested and had no choice. The court found the evidence to be “overwhelming” that Kimball had made false affidavits. The court denied Kimball’s release due to his fraudulent cover-up.
For example, Kimball failed to disclose $ 86,200 in transfers to friends and relatives. He undervalued collectibles by $ 24,000. He omitted transfers to Claw Consulting, LLC, another company he owned (with no employees). Kimball opened a bank account for Claw Consulting and had the bank statements sent to a lawyer at the lawyer’s business address in order to hide the income and sales proceeds he wanted to hide from creditors.
According to court documents, Kimball claimed to have lost millions of dollars in 2013 and 2014, when he actually had gross income of $ 213,231 in 2014 and $ 158,679 in 2013.
From 2015 to 2018, Kimball arranged for $ 479,585 of business income and / or profits from Red Stag Holdings to go into his wife’s personal bank account to conceal payments from creditors and the US bankruptcy trustee. . Kimball arranged for $ 45,300 of income and / or profits from S. Bean Finance and $ 16,300 from Agile Fish to be paid into his wife’s personal bank account to conceal the creditors’ money and of the American bankruptcy trustee.
Kimball initially or completely failed to plan the transfer and sale of its stake in Red River Exploration for $ 116,280, as well as its ownership or interest in a number of companies.
This case was continued by Assistant US Attorney Kathleen D. Mahoney. He has been investigated by the FBI and the United States Bankruptcy Trustee.