oversight

KC Man Indicted for Fraud Scheme Charged with Creating False Obligations, Mail Fraud Kansas City, MO., May 05, 2010

Published by the Department of Education, Office of Inspector General on 2010-05-05.

Below is a raw (and likely hideous) rendition of the original report.

OIG Investigative Reports, KC Man Indicted for Fraud Scheme Charged with Creating False Obligations, Mail Fraud
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FOR IMMEDIATE RELEASE:
Kansas City, MO, May 5, 2010
Office of United States Attorney
BETH PHILLIPS
Western District of Missouri
400 East Ninth Street, Room 5510
Kansas City, MO 64106
For Information Contact Public Affairs
Don Ledford (816) 426-4220
KC MAN INDICTED FOR FRAUD SCHEME
CHARGED WITH CREATING FALSE OBLIGATIONS,
MAIL FRAUD
KANSAS CITY, Mo. – Beth Phillips, United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., man was indicted by a federal grand jury today for creating false obligations and for mail fraud as part of a fraud scheme.
Denny Ray Hardin, 51, of Kansas City, was charged in a 21-count indictment returned by a federal grand jury in Kansas City.
Today’s indictment alleges that, from September 2008 to September 2009, Hardin falsely claimed that he was authorized by the U.S. Department of Treasury to produce and issue fictitious financial instruments called “bonded promissory notes.” Hardin allegedly claimed that these instruments had monetary value, but they were in fact worthless.
According to the indictment, Hardin produced and issued more than 2,000 bonded promissory notes, totaling more than $100 million, for himself as well as for his family, friends, and customers who paid a fee. Hardin allegedly created the notes on his computer and used them to attempt to discharge student loan debts, to purchase a car and a house, and for other personal items and debts.
The indictment alleges that Hardin charged purchasers of the notes a fee – initially $100 per note, which was later increased based on the amount of debt Hardin falsely claimed to be discharged by the note. Hardin falsely claimed that he was authorized to issue the bonded promissory notes because he was a private banker, the indictment says, and that he was the own! er of the Private Bank of Denny Ray Hardin, which operated out of his residence.
Hardin operated a Web site for the purpose of marketing bonded promissory notes to potential purchasers, the indictment says. On his Web site, Hardin allegedly claimed that bonded promissory notes had been accepted by various institutions, which was false.
As part of the fraud scheme, the indictment alleges, Hardin would mail a bonded promissory note to creditors, along with various other documents that included a letter from Hardin stating that the account had been paid in full by the note. When he was notified that the bonded promissory note had been refused as payment, the indictment says, Hardin threatened the creditor! with a lawsuit.
Today’s indictment charges Hardin with 11 counts of fictitious obligations and 10 counts of mail fraud.
Phillips cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Brian P. Casey. It was investigated by the Federal Bureau of Investigation, the U.S. Department of Education – Office of Inspector General, the Kansas City, Mo., Police Department and the U.S. Postal Inspection Service.
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Last Modified: 05/07/2010
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