Bank Says Couple Engaged in Elaborate Fraud Scheme

(CN) – A Florida bank claims in court that an Alabama couple engaged in an elaborate scheme involving multiple companies to prevent their creditors from collecting millions of dollars in debt.

First City Bank of Florida, headquartered in Fort Walton Beach, Fla., sued Alabama residents William McKelvy and his wife Janet McKelvy last week in U.S. District Court for the Middle District of Alabama, alleging violations of the federal RICO Act.

The action was also brought pursuant to Alabama’s Uniform Fraudulent Transfers Act and other state laws.

According to the Jan. 20 complaint, the bank is seeking to recover several million dollars in cash and corporate assets that the McKelvy’s fraudulently transferred to their alter ego, GenFive, their family members, friends and other entities.

The bank is also seeking damages from numerous other co-conspirators.

The corporate defendants named in the complaint include A&CH Properties, BancorpSouth Bank, Beach Metals of Navarre, Blackwater Settlement Solutions, Eastern Metals of Crestview, Generation Five Financial Group, Generation Five Financial Group of Florida, Green Energy Development Group, HCB Financial, North Okaloosa Development Corp., Phillips Capital Partners, Precious Metals of Baker and Square Donut Group.

In a complaint that runs more than 100 pages,  the bank says the couple “orchestrated a scheme to conceal assets from legitimate creditors by funneling them into GenFive (which neither of them own) and then sending them out of the country.”

The action also alleges “a massive conspiracy,” involving “wire fraud, mail fraud, money laundering, and other indictable offenses.”

As a result, the bank claims it has been deprived of “millions of dollars to which it is entitled, and it has been forced to incur substantial fees and costs related to its collection efforts.”

The bank specifically claims four different RICO violations, as well as mail fraud, wire fraud and two counts under the Fraudulent Transfer Act.

The bank says it obtained three separate judgments against the McKelvys — two against Bill and one against Janet — in 2010 and 2011. The amount of the judgments allegedly totaled more than $3.8 million.

Nine months after the first judgment, the complaint claims the couple had their attorney create GenFive.

“Even though they possessed no legal ownership or interest in it, GenFive was nevertheless the primary alter ego of Bill and Janet McKelvy,” the complaint says.

The bank seeks injunctive relief, along with a writ of seizure on the GenFive account and the appointment of a receiver. It also seeks actual and punitive damages.

It is represented by Joel Connally of Strength & Connally in Montgomery, Alabama.

 

%d bloggers like this: