Kansas City payday loan mogul pleads bankruptcy fraud
Del Kimball, a prominent figure in the Kansas City payday loan scene, dropped a federal charge Tuesday afternoon and pleaded guilty to bankruptcy fraud.
Kimball, 53, appeared with his lawyer, JR Hobbs, before U.S. District Court Judge Beth Phillips, who accepted Kimball’s guilty plea. He is to be sentenced on June 2; he will remain on bail until then, as long as he does not travel outside of the Kansas City area and surrender his passport.
He faces no more than five years in prison and up to $ 250,000 in fines.
The charges against Kimball stem from his 2015 personal bankruptcy case.
Kimball, along with a downtown Kansas City payday loan company he co-owned, LTS Management, were forced into involuntary bankruptcy by creditors claiming to owe millions of dollars in payday loan investments. .
In 2017, a bankruptcy trustee accused Kimball of concealing assets, bank accounts and income from his bankruptcy filings. Debtors in bankruptcy are expected to reveal all aspects of their financial situation.
These omissions, according to the trustee, included his sale of a warehouse for nearly $ 1 million, the sale of three cars for over $ 120,000, eight wristwatches worth over $ 29,000 and a painting by Rolling Stones guitarist Ronnie Wood.
The criminal charge against Kimball said he did not disclose the money transfer to a relative and the existence of a company he owned that was formed to conceal income from creditors.
“In his involuntary bankruptcy proceedings, Mr. Kimball failed to make the required full disclosures, âsaid a statement from his attorneys, Hobbs and Marilyn Keller. “He accepts responsibility and will cooperate with the PSR process as sentencing approaches.” “
LTS Management hit hard times after a Justice Department initiative launched in 2013 called Operation Chokepoint prevented banks from doing business with companies considered to be at high risk of fraud, such as debt consolidation and lending on salary.
LTS Management creditor NorthRock LLC loaned Johnson County businessman Joel Tucker $ 32.2 million with a deal that he would use the loan proceeds to fund lending operations on LTS Management salary.
Joel Tucker is the brother of Scott Tucker, a former racing car driver from Leawood who is serving a 16-year prison sentence for running a separate payday loan business that federal prosecutors say operated $ 4.5 million. customers with illegal loans. Joel Tucker himself is awaiting sentencing following his guilty plea to federal charges that he sold fake consumer loan portfolios to debt collectors, who then tried to get people to pay. debts they did not owe.
NorthRock sued Kimball, his business partner Sam Furseth and LTS Management in Jackson County in 2014, claiming they defaulted on the funding agreement when LTS Management stopped paying the original NorthRock loan.
NorthRock went on to win a $ 35 million judgment against them. NorthRock in 2018 also filed for bankruptcy, claiming it had $ 120 million in claims and judgments it could not collect.
NorthRock is in part owned by David Harbor, an Arizona businessman currently on federal charges for allegedly defrauding investors by promising he would use their money to invest in payday lending business in exchange for rates high yields later, but instead pocketed the proceeds to fund his lavish lifestyle.
In November 2020, federal prosecutors filed an alternative indictment against Harbor, alleging, among other things, that Harbor had raised investments in Joel Tucker’s payday lending business without disclosing that he would collect fees from 25% research.
This story was originally published January 19, 2021 3:48 pm.