A former real estate developer and rental property owner from Maquoketa was sentenced to three years’ probation for conspiring with a bank vice president to lie to a bank.
Kenneth Moore, 65, pleaded guilty to one count of conspiracy to make a false statement to a financial institution, a misdemeanor.
He was sentenced to three years’ probation and ordered to pay more than $332,000 in restitution to Fidelity Bank & Trust in Dubuque.
Between 2007 and 2009, Moore worked as a real estate developer in the area of Dubuque and Galena, Illinois. During that time, according to charging documents, he conspired with Dan Raduns, a vice president and lending officer at Fidelity Bank & Trust in Dubuque to lie to the bank about how bank loans to Moore were being used.
“Specifically, they lied about using the money to complete a particular construction project when, instead, it was being used elsewhere,” according to a press release the U.S. Attorney’s Office for the Northern District of Iowa issued Jan. 12.
“Ultimately, the bank lost over $320,000 in loans made on the construction project,” according to the press release.
Ray Scheetz, Moore’s Cedar Rapids attorney, said the housing industry was in crisis in 2007-08, and as a result, Moore applied loan proceeds issued for one project to pay contractors of a different project.
“Although this was a practice that was used by most home builders in the industry for many years without any problems, during the crisis, when banks started feeling severe financial pressure, Fidelity argued that Kenny’s practice of using loan proceeds for different properties was a breach of his loan agreement,” Scheetz said.
Fidelity Bank President Dan Zitelman said he had no comment on the matter when contacted Monday morning.
Moore initially was charged in 2019 with one count of conspiracy to make false statements to a financial institution and three counts of false statements to a financial institution.
After what Scheetz described as a “lengthy negotiation and to bring closure,” he advised Moore to plead guilty to the conspiracy charge. The remaining three charges were dismissed.
Raduns, 66, of Dubuque, also was sentenced to three years’ probation for his role after pleading guilty to one count of conspiracy to make a false statement to a financial institution last August. Raduns was ordered to pay more than $324,000 to Fidelity Bank & Trust, where he formerly served as vice president.
Attempts to call Raduns were unsuccessful.