GJ developers guilty of money laundering
Two local real estate developers pleaded guilty Thursday in a scheme which saw bank loans intended for subdivision projects diverted for personal use, the U.S. Attorney’s Office said Friday.
Franklin “Thad” Harris, 58, and Merlin Unruh, 53, both of Grand Junction, pleaded guilty to money laundering in a hearing before Denver-based U.S. District Judge Christine Arguello. Harris and Unruh are free on bond and scheduled to be sentenced Nov. 10.
The pair were indicted in January 2013 by a Denver grand jury alleging 35 counts of bank fraud, six counts of money laundering and one count of conspiracy to commit money laundering.
The case centered on a pair of subdivision projects: Chatfield IV to be built on 11.75 acres at 3152 E Road, as well as a 12.9-acre project, Thunder Valley, at 3079 F 1/2 Road. Harris and Unruh obtained loans topping $4.6 million from First National Bank of the Rockies to pay for infrastructure.
The indictment alleges they submitted false invoices to the bank and misrepresented progress on the projects to justify a series of draw-downs on the loans.
More than $3.8 million was disbursed by the bank, but authorities said money intended for subcontractors was diverted for personal use including a 401(k) retirement accounts controlled by Harris, Unruh, or their spouses, and payments to McGleeson, Inc., a Grand Junction general contractor owned by Unruh.
Harris and Unruh were the sole board members of another real estate development company, TDSM.
When confronted by bank representatives, Harris and Unruh allegedly provided more false documentation or, in some cases, refused to provide any at all, according to the indictment.
Both men face possible prison sentences up to 10 years and maximum fines of $250,000.