Feds arrest an ex-business partner of San Antonio philanthropist Bill Greehey on tax-evasion charges
A former business partner of oil magnate and philanthropist Bill Greehey was arrested Thursday on federal charges of evading taxes on some of the $2 million he allegedly embezzled from the Quarry Golf Course.
Kyle Lynn Cole, 60, was part of a team that opened the Quarry in December 1992, and in 2007 he went on to manage the course for a business partnership led by Greehey, the founding CEO and chairman of Valero Energy who later became chairman of NuStar Energy.
Cole allegedly pocketed money he was not entitled to over seven years and was indicted by a Bexar County grand jury in 2015 on charges of money laundering and misappropriating funds. He avoided jail by striking a plea deal with the administration of former District Attorney Nico LaHood in November in which the money laundering charge was dismissed.
Cole got 10 years of probation and turned in his certified public accountant license. Prosecutors did not pursue restitution for the $2 million.
Greehey could not be reached for comment Thursday, but officials involved with the plea deal said he did not object to the terms.
“Greehey and his people were consulted on a number of occasions,” said Jay Norton, who was LaHood’s chief of the criminal trial division and oversaw Cole’s prosecution. “As far as I know, (Greehey) was in agreement and understood everything.”
In the latest case, federal authorities went after Cole for allegedly unpaid taxes on the money they claim he illegally obtained. The IRS and Assistant U.S. Attorney William R. Harris obtained a federal indictment this month against Cole, charging him with three counts of tax evasion. Agents with the IRS’ criminal investigation division made the Thursday arrest.
Cole became the managing partner for the golf course in fall 2007.
Quarry Holdings has operated the golf club since 2007, when it signed an 80-year lease with its previous owner, Alamo Garden, a subsidiary of locally based Alamo Cement Co. The partnership bought the roughly 175-acre course in December, Greehey told the San Antonio Express-News in 2016.
Cole has been described as a financial heavyweight whose background included experience as a consultant as well as ownership and development relationships with area courses including the Golf Club of Texas and La Cantera.
The DA’s office alleged that between 2007 and 2014, Cole embezzled $2 million, though Cole and his lawyer, Mike McCrum, disputed the amount.
McCrum, who could not be reached for comment Thursday, told KENS-TV at the time that the matter stemmed from a business partnership disagreement.
“He’s taken responsibility for the actions he took or didn’t take, and we’re going to move forward,” McCrum said at the time.
The Quarry’s general manager, Dustin Burrell, told KENS that the deal didn’t quite fulfill everything Cole’s former business partners were seeking but that it was a step in the right direction.
“Just glad there’s closure and he’s listed as a felon, loss of a CPA license, and got some justice,” Burrell said at the time. “Especially the loss of the CPA license. Hopefully this will stop it from happening to somebody else.”
Burrell couldn’t be reached for comment Thursday.
During a hearing in federal court Thursday, McCrum’s brother, attorney Scott McCrum, appeared on Mike McCrum’s behalf because he was unavailable. Federal prosecutors did not seek Cole’s detention, and U.S. Magistrate Judge Henry Bemporad released him on $30,000 unsecured bail.
Bemporad scheduled Cole’s arraignment for April 3, but Scott McCrum submitted a waiver, meaning a not-guilty plea was entered on Cole’s behalf and that he does not need to appear for the hearing.
As he walked out of federal court, Cole declined comment.
He faces up to five years in prison on each tax evasion count, if convicted.
Guillermo Contreras covers federal courts in San Antonio and international legal issues. Read him on our free site, mySA.com, and on our subscriber site, ExpressNews.com. | email@example.com | Twitter: @gmaninfedland