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FORMER FEDERAL EMPLOYEE INDICTED FOR USING STOLEN MONEY ORDER RECEIPTS IN FRAUD SCHEME

SEPTEMBER 11, 2015

KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a former federal employee has been indicted by a federal grand jury for using stolen money order receipts in a fraud scheme to avoid paying his medical bills.

Byron G. Gorman, 50, of St. Joseph, Mo., was charged in a six-count indictment returned under seal by a federal grand jury in Kansas City, Mo., on Thursday, Sept. 10, 2015. That indictment was unsealed and made public today upon Gorman’s arrest and initial court appearance.

Gorman was employed as an information technology specialist for the U.S. Department of Agriculture's Office of Inspector General, assigned to the Heart of America Regional Computer Forensics Laboratory in Kansas City, Mo., an FBI-facilitated laboratory where he was being trained to become a computer forensic examiner.

The federal indictment alleges that Gorman used stolen money order receipts – taken by Gorman as he participated in a criminal investigation – as fraudulent evidence in court, both to defend himself against a lawsuit against him by his creditors and in his own lawsuit against his creditors. The indictment also alleges that Gorman stole the identities of several persons by forging their signatures on documents he created to use as evidence in court.

According to the indictment, Gorman was a defendant in a civil collection lawsuit in Buchanan County, Mo., in which a judgment had been entered against him and a garnishment of his wages had been ordered to recover monies owed on medical bills incurred at the Heartland Regional Medical Center in St. Joseph. On Sept. 28, 2012, Gorman’s creditors filed a second civil collection lawsuit against him in Buchanan County to recover monies owed on additional unpaid medical bills.

On May 22, 2012, Gorman participated in the execution of a federal search warrant at the offices of a private business in Kansas City, Kan. Gorman was there to search for computer-related evidence. He allegedly found and took five blank U.S. Postal Service money order receipts belonging to the private business for the purpose of facilitating a scheme to defraud Heartland Regional Medical Center and related entities to whom he owed medical bills for services provided at Heartland Regional Medical Center.

The federal indictment alleges that Gorman used the stolen money order receipts and other fraudulent documents created as evidence in his defense. Gorman allegedly claimed that he had submitted postal money orders to his creditors, but the payments had not posted. As evidence, he allegedly provided the five stolen money order receipts, which were filled out to make it appear that money orders had been made out to Heartland Regional Medical Center, as well as a number of forged letters displaying the names and purported signatures of postal employees.

Gorman also used the stolen money order receipts and other fraudulent documents he created as evidence in a lawsuit he caused to be filed against his creditors, according to the indictment. Gorman allegedly placed the names and forged signatures of the actual persons onto letters purporting to be from the U.S. Postal Service and the U.S. Federal Trade Commission onto two letters and two certified mail receipts as part of his wire fraud scheme.

Gorman is charged with one count of mail fraud, two counts of wire fraud and three counts of aggravated identity theft. The federal indictment also contains a forfeiture allegation, which would require Gorman to forfeit to the government any property derived from the proceeds of the alleged offenses, including $18,000.

As an examiner in training, Gorman did not perform any computer forensic examinations unless under the supervision of a fully certified Heart of America Regional Computer Forensic Laboratory (HARCFL) examiner.

Upon learning of the allegations regarding Gorman, the Heart of America Regional Computer Forensic Laboratory did a complete and thorough review of any cases which Gorman may have assisted in the examination of computer forensic evidence. No inconsistencies, errors or issues were noted with any evidence. The HARCFL is a fully accredited laboratory facility following a strict protocol for the examination of evidence and the training protocol for examiners in training.

Dickinson 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 John E. Cowles. It was investigated by the FBI and the U.S. Postal Inspection Service.

This news release, as well as additional information about the office of the United States Attorney for the Western District of Missouri, is available on-line at: http://www.justice.gov/wdmo

Indictment: Gorman Indictment

Kingsville Couple Sentenced for $664,000 Bank Fraud for Lee's Summit Construction Project

U.S. Attorney’s Office September 08, 2015

KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kingsville, Mo., husband and wife were sentenced in federal court today for a $664,000 bank fraud scheme related to his work on a Lee’s Summit, Mo., subdivision.

Dennis R. Key, 52, and his wife, Michal Ann Key, 49, both originally of Kingsville, were sentenced by U.S. Chief District Judge Greg Kays. Dennis Key was sentenced to three years and five months in federal prison without parole. Michal Key was sentenced to 18 months in federal prison without parole. The court also ordered the Keys to pay $664,393 in restitution to their victim.

On Sept. 25, 2014, the Keys pleaded guilty to bank fraud. The Keys admitted that they engaged in a four-year-long bank fraud scheme from August 2006 to November 2009. They stole $664,393 from Dennis Key’s longtime friend by double-billing him for work building a house, and by concealing that double-billing through hidden fees, shell companies and bank accounts, and by signing false and fictitious names to checks.

Dennis Key was the owner of DM & Associates, LLC, a land surveying and engineering consulting business in the Kansas City area. Michal Key did administrative and clerical work for the business, including bookkeeping, paying bills and writing checks.

In January and February 2005, Dennis Key entered into two contracts with his friend, under which he would be paid for surveying and engineering in relation to developing part of a subdivision in Lee’s Summit, and for project management/general contracting in building a house for his friend in that subdivision.

In August 2006, Dennis Key arranged for JM Contractors to act as general contractor for the construction work and to subcontract work to be performed. He instructed JM Contractors to add an extra 15 percent to its fee, which would be paid to Dennis Key. Dennis Key also instructed JM Contractors to conceal the mark-up by hiding the fee in each line item on the bills. Through this contractor, Dennis Key received a $97,500 kickback.

Key also lied to his friend by telling him JM Contracting was a subcontractor, not a general contractor. His friend also lost the $203,361 that he paid JM Contracting for work he had already paid Dennis Key to do.

The Keys also created various shell companies with names similar to the subcontractors working on the house. When they received the real bills from the subcontractors, they prepared false inflated bills and invoices in the names of the shell companies and submitted those for payment. When they received payment, they deposited the funds into the bank accounts of their shell companies. They transferred the funds to their personal bank account, paid the actual subcontractors the amount owed and kept the difference.

This case was prosecuted by Assistant U.S. Attorney Kathleen D. Mahoney. It was investigated by the U.S. Secret Service and the Lee’s Summit, Mo., Police Department.

Reference: http://www.justice.gov/usao-wdmo/pr/kingsville-couple-sentenced-664000-bank-fraud-lees-summit-construction-project