Financial Fraud: Kentuckyana Jones Pleaded Guilty To Five Counts Of Bank Fraud
Smiths Grove Businessman Pleads Guilty To Bank Fraud
Kentuckyana Jones admits to over $1.4 million in bank fraud
LOUISVILLE, Ky. – Michael Todd Barrick, aka Kentuckyana Jones, age 56, of Smiths Grove, Kentucky, pleaded guilty to five counts of bank fraud on Monday in United States District Court in Louisville, announced United States Attorney Russell M. Coleman. Barrick also stipulated to a loss of over $1.4 million. Barrick’s codefendants, Roger Hagan, Lorri Hughes, and Garry Hammer, all pleaded guilty in April.
According to Barrick’s plea agreement and other documents filed in the case, in 2007 Barrick and his co-defendant, Roger Hagan, agreed that Hagan would purchase property at 302 Laurel Street in Smiths Grove from Barrick for $575,000, but Barrick would make all loan payments and keep all rental income. Hagan did not have sufficient assets and income to qualify for the loan, but at Barrick’s direction Hagan submitted a fraudulent financial statement to American Bank & Trust (AB&T) that substantially overstated Hagan’s assets and income. Based on these fraudulent representations, AB&T approved Hagan for the loan. Barrick paid Hagan’s $118,977.50 loan down payment, and gave Hagan $21,422.50 as payment for participating in the transaction. The loan went into default in November 2010.
In 2008, Hagan entered a similar agreement with Barrick to purchase 708 Kelly Road in Bowling Green for $300,000. At Barrick’s direction, Hagan again submitted a fraudulent financial statement to PBI Bank. Based on these fraudulent representations, PBI approved Hagan for the loan. After the loan closed Barrick paid Hagan $6,534 for participating in the transaction, and the loan went into default in March 2010.
In 2011, Barrick recruited co-defendant Lorri Hughes to purchase a Wholesale Mattress Warehouse (WMW) from Barrick for $179,000. The WMW was purportedly located at 1700 N. Dixie Highway in Louisville, but in reality a McDonalds restaurant operated at that address, and had been there for many years. At Barrick’s direction, Hughes submitted a fraudulent financial statement to Monticello Bank that substantially overstated her income and assets. Based on these fraudulent representations, Monticello Bank approved the loan, and after the loan closed Barrick paid Hughes $20,000 for participating in the transaction. The loan went into default in February 2012.
In 2010, Barrick recruited T.P. to purchase Som’ Beach Tanning (SBT), a business located at 140 River Place Avenue in Bowling Green, from Barrick. At Barrick’s direction, T.P. submitted a fraudulent financial statement to Monticello Bank that substantially overstated his assets. The loan was supposed to be collateralized by SBT’s equipment, but Barrick had already used that equipment as collateral in a separate December 2009 loan from BB&T Bank, and that BB&T loan was not satisfied. Based on these fraudulent representations, co-defendant Garry Hammer, a Monticello Bank loan officer, approved the loan, and after the loan closed Barrick paid T.P. $5,000 for participating in the transaction, but Barrick never surrendered control of the business.
In late 2010, Barrick recruited R.R. to purchase a Mattress City Wholesale (MCW) from Barrick for $179,880. Under the terms of their agreement, R.R. would own the business on paper and would receive a small percentage of profits, but Barrick would pay the taxes, insurance, and all loan payments, and would receive the majority of profits. The paperwork Barrick submitted reflected that the MCW was located at 2201 Gallatin Road in Madison, Tennessee. In reality, a PetSmart was located at that address, and had been there for many years. Based on these fraudulent representations, Monticello Bank, through co-defendant Garry Hammer, approved the loan. After the loan closed, Barrick paid R.R. $30,000 for participating in the transaction, and used a significant portion of the remaining proceeds to pay off T.P.’s SBT loan. The R.R. loan went into default in February 2012.
Barrick is scheduled to be sentenced by United States District Court Judge Joseph McKinley in Bowling Green on August 15, 2019, at 9:30 a.m., and faces a statutory maximum penalty of 150 years in prison. Roger Hagan, Lorri Hughes and Garry Hammer are all scheduled to be sentenced in Bowling Green on July 9, 2019.
This case is being prosecuted by Assistant United States Attorneys David Weiser and Josh Judd and was investigated by the Federal Deposit Insurance Corporation (FDIC) and the FBI.