Eastern Kentucky real estate agent faces federal money laundering, fraud charges

Lexington Herald-Leader (KY)

A Morgan County real estate agent has been federally indicted on charges of fraud and money laundering after he got nearly $170,000 in bank loans under false pretenses so that he could pay back debts to other people and cover shortfalls in business accounts, according to court records.

A federal grand jury alleges that Richard Rednour II committed fraud and laundering after taking on more than $1 million in debt and using illegally-obtained loans to try to cover costs.

Rednour is accused of participating in schemes to get $169,357 from First National Bank by putting false reasoning and false financial information on loan applications, according to court documents.

Rednour was a real estate agent who brokered real estate transactions and performed other real estate management and maintenance services at the times of the incidents, according to court documents.

He held ownership shares in and controlled various business entities, including Rednour and Associates Inc., The Appalachian Group, and the New Leaf Group, all of which had different accounts Rednour held through Whitaker Bank, according to court records.

Rednour accumulated large portions of the debt through land purchases and loans from private lenders, according to court documents. He also took money from an escrow account and later used money from a loan to fill in the shortfall on the account.

In March 2014, Rednour agreed to purchase 63 acres of land in Morgan County for $1 million, paying more than $22,000 at the time of closing and more than $977,000 in remaining costs in monthly payments, according to court records.

The monthly payments were set to begin years after the contract was signed. Rednour also agreed to pay taxes, assessments and other fees related to the land he’d purchased, according to court documents.

Years later, in 2018 and 2019, Rednour was still in possession of the land and owed more than $900,000 to those he’d bought it from, according to the indictment.

Indictment: Real estate broker lied in loan applications to cover debts

After incurring debts, Rednour got two loans from the First National Bank of Grayson that totaled about $169,000. One loan was applied for in 2018 for around $120,000 in his and his spouse’s name, according to the indictment.

He said the purpose of the loan was to pay credit card debt and operating expenses stemming from a contract between his business and the Kentucky Housing Corporation, according to court records.

Another loan was requested an approved in 2019 for about $49,000, according to court records. The loan was requested in the name of New Leaf Group, and Rednour said the loan was a cash out refinance for “operating capital.”

In support of the application, court documents state Rednour submitted a personal financial statement that claimed ownership of a farm located within the tracts of land that he had previously purchased.

Rednour borrowed money from private lenders that he did not disclose on the loan applications, according to court documents. A personal financial statement under-reported and omitted the hundreds of thousands of dollars owed by Rednour to other private lenders, according to court documents.

Court documents state that by doing this, Rednour knowingly tried to execute a scheme by submitting false information to the bank.

Real estate agent accused of using loans to cover escrow deficiency

Rednour is accused of transferring money from three different Whitaker Bank accounts in efforts to conceal loans as the source of money he was using to repay what he owed in an escrow account for certain real estate transactions, according to court records.

Rednour had previously accepted payments from someone who was purchasing a property in Stanton and put the individual’s payments in escrow to be held for the completion of the transaction. But Rednour moved the money out of the account and spent it on other transactions, according to court records. The account was then short of the money it needed for the real estate sale.

Rednour allegedly used money from a bank loan to cover the shortage, and allegedly did so by transferring money from three different Whitaker Bank accounts in efforts to conceal loans as the source of money he was using to repay what he owed in the account, according to court records.

One instance listed in court records describes Rednour concealing and disguised the nature, location, source, ownership and source of the proceeds of a $23,000 transfer from one Whitaker Bank account to the escrow account on Jan. 2, 2019.

Rednour faces up to 60 years in prison for all five charges, and fines up to $1,750,000. He could also have a total of up to 11 years of supervised release.

Rednour is scheduled to appear in federal court in Lexington on Oct. 11, according to court records.