Tuesday, April 05, 2016

Home Builder Gets Two Years For Using Forged Lien Waivers To Screw Construction Lender Out Of Over $300K, Then Left It Holding The Bag For Over $800K Loss On Foreclosure Of Partially-Finished House

From the Office of the U.S. Attorney (Springfield, Missouri):
  • Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Bois D’Arc, Mo., business owner was sentenced in federal court [] for a bank fraud scheme related to the construction of his $1.6 million residence.

    Michael R. Ussery, 58, of Bois D’Arc, was sentenced [...] to two years in federal prison without parole. The court also ordered Ussery to pay $1.3 million in restitution to Mid-Missouri Bank.

    On Oct. 30, 2015, Ussery was convicted at trial of 12 counts of bank fraud. 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. A handwriting expert testified that Ussery’s handwriting was on every false lien waiver document.
    Mid-Missouri Bank actually deposited $315,417 into Ussery’s personal bank account based upon the fraudulent representations contained in the lien waiver and invoice documents.
    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. The bank also paid a total of $103,257 to settle mechanic liens placed on the residence by the contractors that Ussery claimed he had paid in the false lien waivers. 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.

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