Grand Junction developers deny guilt in loan fraud case
Two accused of pilfering from $4.6 million in project funding
A pair of Grand Junction developers pleaded not guilty Tuesday to all charges in a 42-count indictment claiming they used bank loans earmarked for two Grand Valley subdivision projects for personal use.
Franklin “Thad” Harris, 57, and Merlin Unruh, 51, said little following their brief arraignment in the courtroom of U.S. Magistrate Gordon Gallagher.
“God bless you, have a good day,” Harris said in the hallways of Wayne N. Aspinall federal building.
Assistant U.S. Attorney Michelle Heldmyer said she will seek to keep the case, and potential trials for both men, in Grand Junction as opposed to Denver.
Harris and Unruh are free on bond following their arrests on Friday by the FBI, which was three days after they were named in a Denver grand jury indictment alleging 35 counts of bank fraud, six counts of money laundering and one count of conspiracy to commit money laundering.
Federal prosecutors have also indicated they will seek forfeiture of unspecified property from Harris and Unruh.
The allegations in the case surround a pair of subdivision projects which never materialized: 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 on the projects.
The indictment alleges the men submitted to the bank false invoices, while misrepresenting progress on the two projects, to justify a series of draw-downs on the loans. The indictment alleges more than $3.8 million was disbursed by the bank, while alleging proceeds were diverted for personal use including a 401K retirement account and payments to McGleeson, Inc., a Grand Junction-based general contractor.
Unruh is the owner of McGleeson, Inc., which has a delinquent filing status with the Colorado Secretary of State, according to state business records.
When confronted by bank representatives about the fraud, 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 a maximum of 30 years in prison, and a fine up $1 million, for each count of bank fraud. Money laundering carries possible penalties up to 10 years in prison, or $250,000 fine, per count.
Grand Junction City Planning Manager Lisa Cox said Tuesday city planners have no pending development applications with Harris or Unruh.