A series of fraud schemes against financial institutions and others totaling more than $30 million earned a former Aurora, Mo., business owner eight years in prison – with no parole – and an order to pay $14,847,541 in restitution to his victims, the inspector general office of the Federal Deposit Insurance Corp. (FDIC) said in a release circulated Thursday.
The release said that Russell Grundy, 51, of Hilton Head Island, S.C., formerly of Aurora, on Jan. 30 pleaded guilty to two counts of wire fraud, one count of making a false statement on a loan application, and one count of money laundering. It said that according to court documents, Grundy’s multiple schemes to defraud financial institutions, a Native American Tribe, and his former clients potentially totaled more than $30 million and resulted in nearly $15 million in actual losses.
Grundy was sentenced Oct. 16 in U.S. district court, the release said.
The FDIC OIG said Grundy was the owner of several companies that focused on advanced technologies, ranging from software development to computer security to addressing the software and hardware technological needs of its clientele. Grundy’s companies included Innovative Objects, LLC, PILR Technology, LLC, Choice Technologies, LLC, Wyerless, LLC, and Audio Input, LLC, it said.
Briefly, the release said that through various fraud schemes, Grundy:
- collected more than $1.8 million in fraudulent license fees between 2012 and 2015 from Land O’Lakes and Nutra Blend related to a software development plan;
- received more than $8 million from Miami Nations Enterprise, a subsidiary company of the Miami Nations Tribe, for his companies based on false claims of a contract for technology services Grundy said the firms had with Wal-Mart Stores, Inc.;
- fraudulently obtained loan funds (based on misrepresentations related to leases with Land O’Lakes for warehouse space Grundy wanted to build) of more than $12 million from UMB Bank, which, after selling the seized land and warehouses built with the fraudulently obtained loans, reportedly had a remaining final loss of $4,214,126.
The OIG also said Grundy, having been indicted by a federal grand jury and while free on bond, committed two additional known financial frauds: one against an individual related to a plan to create a mobile app; and another involving a fraudulent loan application to Palmetto State Bank (S.C.).
The release notes the FDIC OIG participated in the investigation of this case along with the FBI, IRS-Crimes investigation, and the Small Business Administration OIG.