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Jefferson City man pleads guilty to $12 million bank fraud scheme

JEFFERSON CITY, Mo. – A Jefferson City, Mo. man has pleaded guilty in federal court to a $12.4 million bank fraud scheme that included fraudulent Paycheck Protection Program (PPP) loans for four businesses.

Tod Ray Keilholz, 61, pleaded guilty before U.S. Magistrate Judge Sarah W. Hays  to one count of bank fraud, one count of money laundering, and one count of aggravated identity theft.

Keilholz was the sole owner of TRK Construction, LLC, TRK Valpo, LLC, TL Builders, LLC, and Project Design, LLC.

By pleading guilty, Keilholz admitted that he engaged in a bank fraud scheme from Jan. 1, 2018, to Jan. 7, 2021.

Prior to the bank fraud scheme, Keilholz obtained three business loans totaling $3,526,771 from Hawthorn Bank between Aug. 31, 2017, and Sept. 21, 2018. One of these loans financed the purchase of property in Valparaiso, Indiana. As Keilholz’s businesses failed, these loans fell into default and sub-contractors sued him for unpaid invoices during 2019 and 2020. In February 2020, Hawthorn Bank initiated foreclosure proceedings. Keilholz delayed the foreclosure proceedings and paid off these loans and other past due debts with fraudulent PPP loans.

The CARES Act established several new temporary programs and provided for the expansion of others to address the COVID-19 pandemic. Among these programs, the PPP authorized forgivable loans, guaranteed by the Small Business Administration, to small businesses to retain workers and maintain payroll, make mortgage interest payments, lease payments, and utility payments.

Keilholz received a total of $12,430,932 in PPP loans for his four businesses. In each of those loan applications, Keilholz admitted, he failed to disclose his ownership in the other three businesses, and made materially false and fraudulent claims in the loan applications and supporting documentation. Keilholz falsely stated the businesses were in operation on Feb. 15, 2020, and eligible for PPP loans. He inflated the income of those businesses and claimed payrolls for employees who did not exist or no longer worked for him. Additionally, Keilholz applied for a $7,818,705 PPP loan for TRK Valpo but the loan was denied by the bank.

Keilholz received a $1,706,260 PPP loan for TRK Construction, a $3,618,815 PPP loan for TL Builders, a $3,903,857 PPP loan for Project Design, and a $3,202,000 PPP loan for TRK Valpo.

Keilholz admitted that he used PPP loan proceeds for unauthorized purposes other than legitimate payroll, lease and mortgage interest, and utilities as required by the PPP. Keilholz, through TRK Construction, had accrued substantial and delinquent indebtedness to a number of lenders, and all or part of these debts were satisfied by PPP loan proceeds.

The conviction for aggravated identity theft is related to Keilholz’s use of a former TRK Construction employee whose name and Social Security number were used without his knowledge or authoritization on wage reports in connection with a fraudulent PPP loan application for TRK Valpo.

Under the terms of his plea agreement, Keilholz must forfeit to the government any property involved in, or derived from the proceeds of his bank fraud scheme, including a money judgment of $12,430,932, two properties in Jefferson City, one property in Valparaiso, one property in La Porte, Ind., four vehicles (a 2020 Chevrolet Silverado, two 2021 Chevrolet Silverados, and  a 2019 BMW X5), a 2020 John Deer ZTrak, a 2020 John Deere Tractor, a Kubota Compact Track Loader, a Gents 43mm IWC Schaffhausen Perpetual Chronograph wristwatch, two Gents stainless steel Rolex Sea-Dweller self-winding automatic diver’s watches, and a Gents Citizen Eco-Drive Radio-controlled world time self-winding automatic watch with sapphire crystal.

Under federal statutes, Keilholz is subject to a sentence of up to 40 years in federal prison without parole, plus a mandatory consecutive two-year sentence for aggravated identity theft. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.

This case is being prosecuted by Supervisory Assistant U.S. Attorney Michael S. Oliver. It was investigated by the Board of Governors of the Federal Reserve System, Consumer Financial Protection Bureau, Office of Inspector General; the Small Business Administration, Office of Inspector General; the Treasury Inspector General for Tax Administration; the FBI; and IRS-Criminal Investigation.

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