A Morgan County real estate agent has been federally charged with fraud and money laundering after he obtained nearly $170,000 in bank loans under false pretences so he could pay off debts to other people and cover expenses. business account deficits, according to court records.
A federal grand jury alleges that Richard Rednour II committed fraud and laundering after incurring more than $1 million in debt and using illegally obtained loans to try to cover the costs.
Rednour is accused of participating in schemes to obtain $169,357 from First National Bank by putting false reasoning and financial information on loan applications, according to court documents.
Rednour was a real estate agent who negotiated real estate transactions and performed other property management and maintenance services at the time of the incidents, according to court documents.
He owned shares in and controlled various business entities, including Rednour and Associates Inc., The Appalachian Group and the New Leaf Group, all of which had different accounts that Rednour held through Whitaker Bank, according to court records.
Rednour racked up much of the debt through land purchases and loans from private lenders, according to court documents. He also took money from an escrow account and then used money from a loan to make up the shortfall in the account.
In March 2014, Rednour agreed to purchase 63 acres of land in Morgan County for $1 million, paying more than $22,000 at closing and more than $977,000 in remaining costs in monthly payments, according to court records.
Monthly payments were to begin years after the contract was signed. Rednour also agreed to pay taxes, assessments and other fees related to the land he purchased, according to court documents.
Years later, in 2018 and 2019, Rednour was still in possession of the land and owed more than $900,000 to those he bought it from, according to the indictment.
Indictment: Realtor lied in loan applications to cover debts
After running into debt, Rednour obtained two loans from the First National Bank of Grayson which totaled approximately $169,000. A loan was requested in 2018 for approximately $120,000 in his and his wife’s name, according to the indictment.
He said the purpose of the loan was to pay credit card debt and operating expenses stemming from a contract between his company and the Kentucky Housing Corporation, court records show.
Another loan was requested and approved in 2019 for around $49,000, according to court records. The loan was requested on behalf of New Leaf Group, and Rednour said the loan was a cash refinance for “working capital”.
In support of the claim, court documents indicate that Rednour submitted a personal financial statement that claimed ownership of a farm located in the plots of land he had previously purchased.
Rednour borrowed money from private lenders that he did not disclose in loan applications, according to court documents. A personal financial statement understated and omitted hundreds of thousands of dollars owed by Rednour to other private lenders, according to court documents.
Court documents indicate that in doing this, Rednour knowingly attempted to execute a scheme by submitting false information to the bank.
Estate agent accused of using loans to cover receivership default
Rednour is accused of transferring money from three different Whitaker Bank accounts in an attempt to conceal loans as the source of money he was using to pay off what he owed in an escrow account for certain real estate transactions, according to court records.
Rednour had previously accepted payments from a person buying property in Stanton and placed the individual’s payments in escrow to be held until the transaction was completed. But Rednour withdrew the money from the account and spent it on other transactions, according to court records. The account was then short of the money needed for the real estate sale.
Rednour allegedly used money from a bank loan to cover the shortage, and did so by transferring money from three different Whitaker Bank accounts in an attempt to disguise loans as the source of money he was using to repay what he owed on the account, according to court records.
A case listed in court records describes Rednour concealing and disguising the nature, location, source, ownership and source of proceeds of a transfer of $23,000 from a Whitaker Bank account to the escrow account on January 2 2019.
Rednour faces up to 60 years in prison for the five counts and fines of up to $1,750,000. He could also have up to 11 years of probation in total.
Rednour is scheduled to appear in federal court in Lexington on October 11, according to court records.