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Former Missouri business owner pleads guilty in fraud scheme

January 30, 2020 GMT

SPRINGFIELD, Mo. (AP) — A former Aurora, Missouri, business owner pleaded guilty Thursday to committing fraud schemes involving millions of dollars.

Russell Grundy, 50, of Hilton Head Island, South Carolina, pleaded guilty to making a false statement on a loan application, money laundering and two counts of wire fraud.

In one scheme, Grundy contracted with Land O’Lakes Inc. and its subsidiary, Nutra Blend, to create software to track product disbursement and to provide equipment and technical support for the software. Prosecutors said Grundy falsely told the companies he was paying fees to a third party but, in reality, he kept the fees for himself.

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Land O’Lakes and Nutra Blend paid more than $1.3 million in fraudulent license fees between 2012 and 2015, prosecutors said.

In another scheme, Grundy falsely told Miami Nations Enterprise that his companies had received a $3.5 million contract from Walmart in order to receive a loan. Miami Nations Enterprise loaned Grundy the money to cover the costs associated with obtaining the Walmart contract. Grundy admitted he used that money for personal expenses, including building a home in Charleston, South Carolina.

In 2014, Miami Nations Enterprise paid an additional $2 million to purchase a 70 percent interest in Grundy’s companies.

Also in 2014, Grundy applied for three loans from UMB Bank. He admitted that he fraudulently obtained a $5.4 million loan by providing false information in the loan application.