Jury Convicts Builder Of Using Bogus Invoices, Forged Lien Waivers To Fraudulently Pocket Advances From Construction Loan Purportedly To Build His $1.6 Million Personal Residence; Foreclosure Ensued After Work Stopped, Leaving Lender w/ $780K+ Loss On Sale Of Partially Finished House

From the Office of the U.S. Attorney (Springfield, Missouri):

• [A] Bois D’Arc, Mo., business owner was convicted [] at trial of a bank fraud scheme related to the construction of his $1.6 million residence.
  
  Michael R. Ussery, 58, of Bois D’Arc, was found guilty of 12 counts of bank fraud in a Dec. 14, 2011, federal indictment.
  
  Ussery was the owner/operator of two businesses in 2007, USS Properties and Villa Properties, both of which purchased real estate for residential development. During this time, Ussery also was building a $1.6 million home for himself in Bois D’Arc. Mid-Missouri Bank agreed to provide a $1.6 million construction loan to build the residence; $1.15 million was used to pay off the previous bank which had financed the construction of the residence up to that point, and the remaining $450,000 was supposed to have gone to completing the construction of the residence. When persons worked on the house, Ussery was supposed to obtain an invoice and a lien waiver from the contractors and submit these documents to Mid-Missouri Bank, which would then make a disbursement of the amount owed to Ussery’s personal bank account.
  
  A dozen invoices and lien waivers totaling $315,417 were submitted to Mid-Missouri Bank from May 29 to June 25, 2007, purportedly from persons or companies building the residence, to draw money from the $1.6 million loan amount for construction of the residence. In fact, each invoice and lien waiver was false, faked or forged. They were either created by, or caused to be submitted by, Ussery, and contained materially false or fraudulent, representations. The companies or persons who were indicated on the fraudulent invoices and lien waivers did not prepare or submit the invoices and lien waivers, did not perform the work on the property as indicated in the invoices, did not agree to waive any lien on the residence for work actually done on the property, and did not receive any payments for work done as indicated in the invoices.
  
  Auditors at the bank visited the construction site in June and July of 2007 and saw nothing that would indicate that this amount had been spent on the construction of the residence, apart from the hanging of drywall. Mid-Missouri Bank actually deposited $315,417 into the defendant’s personal account based upon the fraudulent representations contained in the lien waiver and invoice documents. It appears that the money, which had been meant for building the house, was used instead for business relating to USS Properties or Villa Properties.
  
  Ussery eventually stopped construction on the Bois D’Arc property and the bank had to foreclose on the loan. The bank took a $782,349 loss after the sale of the property with its partially finished house. Ussery filed for bankruptcy relief in 2011.
  
  Although not charged in the indictment, evidence introduced during the trial indicated that Ussery also committed similar fraudulent activity against a husband and wife who hired him to build a personal residence in Greene County, Mo. Ussery started construction of the house in 2007, but did not complete the project. The victim clients discovered that Ussery was providing false lien waivers to Great Southern Bank to obtain loan draws from the construction loan.
  
  Evidence introduced during the trial also indicated that Ussery or his company submitted false lien waivers to obtain construction loan draws in 2005 from First Midwest Bank in Jackson, Mo., which would also be considered relevant conduct that was not charged in the indictment.

Source: Jury Convicts Bois D'Arc Man of Bank Fraud Related to $1.6 Million Home.