A Kansas City payday loan magnate waives indictment, admits guilt to federal charge
Del Kimball, a prominent figure in Kansas City’s payday lending scene, waived a federal indictment on Tuesday afternoon and pleaded guilty to a bankruptcy fraud charge.
Kimball, 53, appeared with his attorney, J.R. Hobbs, before U.S. District Court Judge Beth Phillips, who accepted Kimball’s guilty plea. He’s set for sentencing on June 2; he will remain out on personal recognizance bond until then, so long as he does not travel outside of the Kansas City area and surrenders his passport.
He faces no more than five years in prison and up to a $250,000 fine.
The charges against Kimball stem from his personal bankruptcy case from 2015.
Kimball, as well as a downtown Kansas City payday loan company he co-owned called LTS Management, were forced into involuntary bankruptcy by creditors claiming to be owed millions of dollars from investments into payday lending.
In 2017, a bankruptcy trustee accused Kimball of concealing assets, bank accounts and income from his bankruptcy disclosures. Debtors in bankruptcy are supposed to reveal all aspects of their financial condition.
Those omissions, according to the trustee, included his sale of a warehouse for nearly $1 million, the sale of three cars for more than $120,000, eight wristwatches worth more than $29,000 and a painting by Rolling Stones guitarist Ronnie Wood.
The criminal charge against Kimball said he failed to disclose the transfer of money to a relative and the existence of a company he owned that was formed to conceal income from creditors.
“In his involuntary bankruptcy proceeding, Mr. Kimball did not adequately make full disclosures as required,” said a statement by his attorneys, Hobbs and Marilyn Keller. “He accepts responsibility and will cooperate in the pre-sentence report process as sentencing approaches.”
LTS Management fell on hard times after a Justice Department initiative that launched in 2013 called Operation Chokepoint caused banks to avoid doing business with companies deemed at high risk for fraud, like debt consolidation and payday lending.
One LTS Management creditor, NorthRock LLC, loaned $32.2 million to Johnson County businessman Joel Tucker with an agreement he would use the loan proceeds to fund LTS Management’s payday lending operations.
Joel Tucker is the brother of Scott Tucker, a former race car driver from Leawood who is serving a 16-year prison sentence for running a separate payday loan enterprise that federal prosecutors said exploited 4.5 million customers with illegal loans. Joel Tucker himself awaits sentencing following his guilty plea to federal charges that he sold bogus consumer loan portfolios to bill collectors, who then tried to get people to pay up on debts they did not owe.
NorthRock sued Kimball, his business partner Sam Furseth and LTS Management in Jackson County in 2014, saying they had defaulted on the funding arrangement when LTS Management stopped making payments on the original NorthRock loan.
NorthRock later won a $35 million judgment against them. NorthRock in 2018 went into bankruptcy, too, claiming it had $120 million in claims and judgments it could not collect.
NorthRock is partly owned by David Harbour, an Arizona businessman currently under federal indictment for allegedly defrauding investors by promising he would use their money to invest in payday lending business in exchange for high rates of return later on, but that he instead pocketed the proceeds to fund his lavish lifestyle.
In November 2020, federal prosecutors filed a superseding indictment against Harbour alleging, among other things, that Harbour raised investments in Joel Tucker’s payday lending business without disclosing that he would collect a 25% finder’s fee.
This story was originally published January 19, 2021 at 3:48 PM.
