Del Kimball, a prominent figure in Kansas City’s payday loan scene, dropped a federal indictment Tuesday afternoon and pleaded guilty to one count of bankruptcy fraud.
Kimball, 53, appeared with his attorney, 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 personal bond until then, as long as he does not travel outside 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 personal bankruptcy filing from 2015.
Kimball, along with a downtown Kansas City payday loan company he co-owned called LTS Management, were forced into involuntary bankruptcy by creditors claiming they owed millions of dollars in debt. investments in payday loans.
In 2017, a bankruptcy trustee accused Kimball of concealing assets, bank accounts and income from his bankruptcy filings. Bankrupt debtors are expected to disclose 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 more than $120,000, eight wristwatches worth more than $29,000 and a painting of Rolling Stones guitarist Ronnie Wood.
The criminal prosecution against Kimball said he failed to disclose the transfer of money to a relative and the existence of a company he owned which was set up to conceal income from creditors.
“In his involuntary bankruptcy proceedings, Mr. Kimball failed to make adequate full disclosures as required,” said a statement from his attorneys, Hobbs and Marilyn Keller. “He accepts responsibility and will cooperate with the pre-sentence reporting process as sentencing nears.”
LTS Management fell on hard times after a Justice Department initiative launched in 2013 called Operation Chokepoint forced banks to avoid doing business with businesses deemed to be at high risk of fraud, such as debt consolidation and lending. on salary.
A creditor of LTS Management, NorthRock LLC, loaned Johnson County businessman Joel Tucker $32.2 million with an agreement 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 Leawood race car driver who is serving a 16-year prison sentence for running a separate payday loan business that federal prosecutors say tapped $4.5 million of customers with illegal loans. Joel Tucker himself is awaiting sentencing following his guilty plea to federal charges of selling fake consumer loan portfolios to debt collectors, who then tried to trick people into paying debts that they shouldn’t.
NorthRock sued Kimball, his business partner Sam Furseth, and LTS Management in Jackson County in 2014, claiming they breached the financing agreement when LTS Management stopped making payments on NorthRock’s original loan.
NorthRock later won a $35 million judgment against them. NorthRock in 2018 also filed for bankruptcy, saying it had $120 million in claims and judgments it could not collect.
NorthRock is partly owned by David Harbour, an Arizona businessman currently facing federal indictments for allegedly defrauding investors by promising he would use their money to invest in payday lending business in trading for high rates of return later, but instead pocketed the proceeds to fund his lavish lifestyle.
In November 2020, federal prosecutors filed a superseding indictment against Harbor alleging, among other things, that Harbor increased investments in Joel Tucker’s payday lending business without disclosing that he would receive a commission from intermediate 25%.
This story was originally published January 19, 2021 3:48 p.m.