The chief financial officer of Kenwood Towne Place, LLC, has been indicted for conspiracy to commit bank fraud.
Tina Schmidt served as the chief financial officer for several interrelated businesses including Bear Creek Capital, LLC, and Kenwood Towne Place, LLC. The indicted alleges that Schmidt intended to defraud Bank of America and to get money and property owned by the bank.
During December of 2007, Bank of America agreed to lend KTP in excess of $94 million, however conditions were place on the manner KTP could draw on and use the funds.
The indictment alleges she intentionally submitted paperwork to Bank of America containing false information about how KTP intended to use a substantial portion of the initial proceeds drawn from the loan. Schmidt allegedly used part of the money to fund real estate projects other than Kenwood Towne Place and didn't report it to Bank of America.
With the money going to other projects, there wasn't money left to pay small businesses and subcontractors working on the Kenwood Towne Place project. The indictment alleges Schmidt tried to hide this fact and submitted false paperwork to Bank of American falsely stating that the loan money had been used to pay small businesses and subcontractors, among other things.
When many of the subcontractors stopped work on the project for lack of payment, Schmidt allegedly continued to make false statements and fraudulent representations to Bank of America to hide the fact that KTP had not spent the bank's money as promised.