REXBURG — A Rexburg man is facing eight felony charges of wire fraud and aggravated identity theft after allegedly defrauding his business partners out of hundreds of thousands of dollars.
Kelly McCandless was indicted in U.S. District Court Wednesday on four counts of wire fraud and four counts of aggravated identity theft.
According to the indictment, McCandless entered into an agreement with two business partners to develop an apartment complex in Rexburg. One of the partners owned 51% of the project, the other had 24.5% and McCandless owned the remaining 24.5% in exchange for working as the general contractor on the complex.
The three partners obtained a construction loan from a bank with funds going to McCandless so he could pay subcontractors and vendors once they submitted invoices, court documents say. Between August 2017 and October 2018, prosecutors alleged McCandless “created forged, falsified and resubmitted invoices based on legitimate invoices … specifically, the defendant often reproduced the invoices but with an inflated number for the amount billed.”
Investigators say McCandless submitted the falsified invoices to the bank “knowing that the amounts to be disbursed were materially in excess of what should have been paid based on the actual invoices that had been submitted to the defendant.”
McCandless is also accused of forging lien waivers from subcontractors and vendors to match the amounts of the falsified invoices. A lien waiver is a document from a contractor or other party stating they have received payment and waive any future lien rights to the property for the amount paid.
Prosecutors additionally allege McCandless submitted estimates for payments for furnishings but he never bought the items and instead used money from the apartment project’s bank account for personal expenses, including meals. He’s also accused of transferring money to his personal bank accounts to buy items such as vehicles.
The indictment details four dates on when the alleged crimes occurred:
On Sept. 17, 2017, McCandless allegedly asked the bank for payment on a previously submitted invoice of $81,954.
On Jan. 9, 2018, McCandless allegedly asked the bank for payment and to support prior payments on falsified invoices of $180,194; $122,645; $62,488 and $263,180.
On Feb. 3, 2018, McCandless allegedly asked the bank for payment on a falsified invoice of $17,781.
On Mar. 27, 2018, McCandless allegedly asked the bank for payment on furnishing estimates for $124,654 and $83,644.
McCandless is accused of aggravated identity theft for “knowingly possess(ing) a means of identification of another person, name, signatures, during in and relation to a felony.”
The indictment says McCandless used signatures of other construction or concrete company employees to falsify unconditional lien waivers for $180,194; $122,645; $62,488 and $295,680.
McCandless was issued a summons to appear in federal court. A hearing date had not been set as of Tuesday morning.
Although McCandless is accused of a crime, it does not necessarily mean he committed it. Everyone is presumed innocent until proven guilty. If he is found guilty, McCandless could serve up to 20 years in prison.
Read the entire indictment here:
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