Two GJ developers indicted in multimillion dollar fraud
Two Grand Junction men were arrested Friday on suspicion of multimillion dollar bank fraud, according to the U.S. Department of Justice.
Franklin Thad Harris, 57, and Merlin D. Unruh, 51, were arrested in Grand Junction after being indicted by a federal grand jury Tuesday in Denver on suspicion of bank fraud and money laundering.
The two men are accused of enacting a scheme between October 2007 and December 2008 to defraud First National Bank of the Rockies. According to the indictment, Harris and Unruh used fraudulent and false representations and documentation to influence bank officials to approve requests to withdraw funds for construction expenses. The indictment accused the men of using the loans for personal expenditures.
Both men are in the construction business and Unruh worked as a general contractor on projects with Harris, according to the indictment. Together they owned TDSM, a real estate company, and developed the Chatfield subdivision, including the 11.75-acre Chatfield IV portion at 3152 E Road. Harris also had the Thunder Valley project at 3079 F 1/2 Road, consisting of single-family homes on 12.9 acres.
According to the indictment, TDSM got a $2,050,000 draw-down line of credit from First National Bank of the Rockies on Oct. 19, 2007, to develop Chatfield IV. From October 2007 to July 2008, Harris and Unruh made five draw requests of the bank, for a total disbursement of $1,524,112.83, according to the indictment.
In early April 2008, TDSM got a $2,625,000 draw-down line of credit from the bank to develop Thunder Valley. Over the course of the Thunder Valley I loan, the two men made nine draw requests for a total disbursement by the bank of $2,290,474.48, according to the indictment.
To carry out the alleged fraud, according to the indictment, Harris, Unruh and others submitted to the bank fraudulent information, altered or duplicate invoices and false information about costs for work done. They also are accused of knowingly misrepresenting to bank officials the nature of the work done and progress made on the Chatfield IV and Thunder Valley I developments and providing false or no documentation about the draw requests when confronted by bank officials, according to the indictment.
The men were arrested on suspicion of 35 counts each of bank fraud, six counts of money laundering and one count of conspiracy to commit money laundering. They were released on bond Friday and are scheduled for arraignment at 3 p.m. Tuesday in Grand Junction.
Agents with the Federal Bureau of Investigation and Internal Revenue Service Criminal Investigation cooperated on the case, which is being prosecuted by Assistant U.S. Attorney Michelle Heldmyer.