David Saks: May 2014

David Saks - Real Estate Broker - The Real Estate Mart of Tennessee, Inc. - 4040 North Watkins-Suite #4 - Memphis, Tennessee 38127 - Phone (901) 357-4663

Man Indicted for $6.2 Million Fraud Schemes

Former Liberty Man Indicted for $6.2 Million Fraud Schemes

U.S. Attorney’s Office May 02, 2014
  • Western District of Missouri (816) 426-3122

KANSAS CITY, MO—Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a former Liberty, Missouri man has been indicted by a federal grand jury for a $6.2 million series of investment fraud schemes.

Henry Thomas Hammond, 57, of Ponte Vedra Beach, Florida, formerly of Liberty, was charged in a 12-count indictment returned under seal by a federal grand jury in Kansas City, Missouri, on Wednesday, April 30, 2014. The indictment was unsealed and made public today upon Hammond’s arrest and initial court appearance in Florida.

Hammond owned, operated, or was involved in several businesses, including Longhorn Construction Inc.; Longhorn Properties LLC; Longhorn Development Group Inc.; Longhorn Construction-North American Investment Group Inc., and others.

The federal indictment alleges that between July 16, 2008 and November 24, 2010, Hammond engaged in several schemes to defraud individuals and entities by soliciting investments to support a Ponzi scheme. Hammond allegedly promised investors an exorbitant rate of return on their investments, when in fact he used those investments for his own personal expenses or to pay other investors as part of the Ponzi scheme. Hammond allegedly deposited investors’ funds into his personal bank account to make vacation home payments for a residence at Table Rock Lake, for example, and for elaborate hunting excursions.

Blackberry Development Scheme

Among the fraud schemes cited in the indictment, one example involves the Blackberry commercial development in Liberty, which Hammond never completed.

On October 16, 2007, Patriots Bank approved a loan to Duffey Land Development LLC for construction financing for two commercial retail/office buildings in the Blackberry development. Duffey contracted with Longhorn Construction to build two buildings, with Hammond as the general contractor. Hammond was responsible for paying the subcontractors for work performed. Hammond submitted invoices received from the subcontractors to Duffey. Duffey submitted a draw request to Patriots Bank. The funds were disbursed from the bank to Duffey and, then from Duffey to Hammond. It was Hammond’s responsibility to pay the subcontractors.

The indictment alleges that Hammond received approximately $1,203,331 from January 2008 through December 2008 but that he fraudulently used funds for personal expenses, such as a trip to Las Vegas, hunting, a lake house, and money to his wife. During this year, Hammond spent approximately $48,314 for hunting expenses. Hammond sent approximately $45,500 to Hogan Land Title to purchase a large lake home. A total of $298,814 was diverted for personal use from the construction draw process instead of paying subcontractors.

In October 2009, International Finance and Trust (IFT) entered into a contract with Hammond involving investing $3 million to purchase land for development of the Blackberry project. Another investor provided $1 million for a 25 percent ownership stake in Blackberry. After receiving $2 million in funding, the indictment says, Hammond transferred it to an account held in the United Arab Emirates to be utilized in an overseas investment platform. Investors were not told the funds were being utilized for the investment platform. Hammond allegedly received approximately $499,950 from IFT’s investment and deposited the funds into one of his companies’ bank accounts.

Wire Fraud Scheme

During a 27-month period from August 26, 2008 to November 22, 2010, Hammond allegedly used his various wire fraud schemes to pay for his personal expenses, including:

  1. $1,303,632 in personal withdrawals made by Hammond
  2. $961,707 for Hammond’s lake house, valued at $2.25 million
  3. $777,742 for purported business expenses for Hammond’s companies
  4. $442,962 for Hammond entertainment/retail
  5. $325,696 for Hammond hunting excursions/taxidermy
  6. $279,628 for personal vehicle purchases

Bankruptcy Fraud

According to the indictment, Hammond filed a Chapter 13 Bankruptcy on May 17, 2012, to stop foreclosure on his Liberty residence. In his bankruptcy filings, Hammond failed to disclose personal guarantees provided to several investors. Hammond was dismissed from the Chapter 13 Bankruptcy on September 17, 2012, because he failed to make payments as agreed to in his bankruptcy plan. The bankruptcy case was closed on March 13, 2013.

False Seal Scheme

In connection with his scheme to defraud, Hammond fraudulently used the Department of Justice emblem and “U.S. Department of Justice, Office of Legislative Affairs” letterhead on a September 30, 2009 letter. The fraudulent letter was purportedly written on behalf of the U.S. Assistant Attorney General to U.S. Senator Lindsey Graham. Hammond used the letter with the letterhead and seal to divert attention from his involvement in investment fraud and to convince investors or other unindicted conspirators to turn over controls of some investments.

The federal indictment charges Hammond with two counts of bank fraud, four counts of wire fraud, one count of bankruptcy fraud, four counts of money laundering, and one count of using the seal of the Department of Justice on a fraudulent letter.

The indictment also contains a forfeiture allegation, which would require Hammond to forfeit to the government any property obtained as a result of the alleged violations, including $6,250,289.

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 Jane Pansing Brown. It was investigated by the FBI.


David Saks

Time&Temp Memphis

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