The U.S. attorney’s office announced last week that a federal grand jury has issued a superseding indictment against former county Planning Commission Chairman Douglas Morgan of Chesterfield, adding a wire fraud charge involving North County Development, LLC, formerly known as Camco Development, LLC.
North County Development was a partnership that proposed the development of a casino complex in north St. Louis County and applied for a Missouri Gaming License for that casino development during 2010. The partnership held an option to purchase approximately 376.8 acres of land in Spanish Lake in north county and to develop the land into a casino project that included a casino, hotel, golf course, convention center, parking garage and restaurants, according to a news release.
The publicly disclosed owners of North County Development did not include Morgan but did include: Kenneth Goldstein; Bradley Lakin, the son of Thomas Lakin; and Julie McDonald, the daughter of Ricki Lee Jones, all longtime friends and associates of Morgan, the release stated.
The additional wire-fraud charge relates to a scheme by Morgan to defraud a longtime friend and associate, identified in the superseding indictment as J.T. According to the superseding indictment, Morgan claimed that he held secret interests in several casino projects between 2002 and 2010, including the North County Development, LLC.
Based on Morgan’s representations, J.T. invested approximately $1.5 million with Morgan based upon Morgan’s claim of ownership and the false representations that the funds would be used for expenses and costs related to the casino project developments in exchange for 50 percent of Morgan’s interest in the casino developments, according to the indictment. Morgan instead used the funds provided by J.T. for personal expenses unrelated to the casino development projects.
The new charge also relates to Morgan’s securing loans of an additional $200,000 from J.T., as well as a combined $250,000 from three other longtime friends and associates based upon Morgan’s false representations that funds in personal trust accounts purportedly held by him had been seized, frozen or held up in some fashion by the IRS or some other governmental agency, and the false representation to at least one of the individuals that the loan was for Morgan’s portion of the Missouri gaming license application related to the proposed North St. Louis casino development, according to the release.
The new charges are in addition to bank fraud charges in the original indictment filed in April of this year. According to the original indictment, from 1999 through 2010 Morgan obtained a series of loans from Commercial Bank based upon his submission of false and deceptive Personal Financial Statements.
Morgan obtained approximately 15 loans in his own name, while personally guaranteeing other loans in his children’s names, according to the original indictment. The Personal Financial Statements falsely represented that Morgan personally held millions of dollars in funds, assets, and real estate when he did not, the original indictment stated.
Further, Morgan falsely represented that the Internal Revenue Service (IRS) had frozen and placed holds on purported trust funds valued in excess of 10 million dollars when, in fact, he held no such trust funds, and the IRS had not, in fact, taken action against his funds, according to the original indictment.
Outstanding balances on the falsely obtained loans are approximately $1.5 million.
If convicted, the count of bank fraud carries a maximum penalty of 30 years in prison and/or fines up to $1 million. Wire fraud carries a maximum of 20 years in prison and/or fines up to $250,000.
This case was investigated by the Federal Bureau of Investigation. Assistant U.S. Attorney Hal Goldsmith is handling the case for the U.S. Attorney’s Office.
