St. Louis Man Pleads Guilty to Multi-Million Dollar Fraud
ST. LOUIS, Mo. (KMOX) — An area business man has plead guilty to fraud charges steaming from the refinancing of two St. Louis City properties.
The United States Attorney’s Office says between October 2008 and February 2009, Richard Kalina did business through a number of entities in the St. Louis area. During this time he refinanced his debt on two properties he owned from a financial institution formerly known as Champion Bank to Southern Commercial Bank (“SCB”).
The first property is located at 325 Paul Avenue, Ferguson, the second property is located at 462 North Taylor, St. Louis.
SCB agreed to lend Kalina $2.46 million secured by these two properties based on certain conditions; that Kalina pay the real estate taxes still outstanding on the properties for the year 2007, and the outstanding real estate taxes for 2008 were to paid out of the loan proceeds.
Kalina agreed to the condition regarding the 2007 taxes and falsely represented to the bank that he would pay them.
The 2007 taxes due and owing on the county property were approximately $81,000 and approximately $13,000 on the city property.
The county taxes were paid by means of three checks, two of which were drawn on an account controlled by Kalina at Royal Bank and one of which was drawn on the an account he controlled at Bremen Bank and Trust.
The city taxes were paid by means of a check drawn on an account at Southwest Bank.
Kalina submitted the checks in the amount of the outstanding 2007 taxes to the appropriate government revenue offices for each property and obtained a “Paid” receipt for the 2007 taxes as evidence of his payment of the taxes.
Contrary to his representations to the bank, Kalina never intended to pay the outstanding taxes on the properties because there were no funds in the accounts.
As for the check drawn on the Bremen Bank and Trust Account, after obtaining a “Paid” tax receipt from St. Louis County, Kalina prepared a Stop Payment Request with that institution which falsely stated his checks had been stolen and instructed the bank not to honor his check to St. Louis County.
The refinancing closed on or about February 4, 2009, Kalina was slow in paying on his debt and, in August and September of 2009, met with a representative of SCB and promised to make payments immediately. Contrary to those representations, he did not make the promised payments. Ultimately, SCB foreclosed on the loan and anticipates realizing a loss of approximately $500,000.
Kalina, 46, of St. Louis, pled guilty to one felony count of bank fraud before United States District Judge Henry E. Autrey. Sentencing has been set for June 28, 2011.
Bank fraud carries a maximum penalty of 20 years in prison and/or fines up to $250,000.