Man accused of defrauding developers of KC hotels sentenced to prison, $8M fine
The founder of a real estate group accused of defrauding developers by stealing millions in deposits meant for construction projects, including for a pair of hotels in the Kansas City area, has been sentenced to more than three years in prison and ordered to pay back nearly $8 million.
David Ingram pleaded guilty to one count of wire fraud in August in U.S. District Court in Kansas City, Kansas, and was sentenced to 46 months in prison Tuesday. A judge also ordered Ingram to pay about $7.9 million in restitution to four development groups, according to court documents.
J. Justin Johnston, an attorney for Ingram, didn’t respond to a request for comment Wednesday.
Prosecutors said Ingram, who ran the real estate finance firm AltosGroups, and his investors signed agreements that would finance the construction projects after Ingram represented he had “warehouse” lines of credit with the financial institutions J.P. Morgan Chase and Bank of America, according to court documents. Deposits from investors, which Ingram allegedly represented would trigger his lines of credit, were to be placed into a dedicated account for each project.
“In reality, however, the defendant had no warehouse lending relationship with J.P. Morgran Chase or Bank of America and the deposits were not kept in a dedicated account, but rather used for the defendant and his wife’s personal expenses, other business purposes, or transferred to other accounts controlled by the defendant or his wife,” prosecutors wrote in court documents.
Prosecutors identified four construction projects with investors Ingram allegedly defrauded: a Hard Rock Hotel and Casino in Edwardsville, a Hyatt House hotel in Kansas City, a hotel in Utah and an assisted living facility in Ohio.
In March 2020, Ingram allegedly sent a letter to investors saying he would not be able to provide financing for the projects, according to court documents. When investors requested the return of their deposits, Ingram didn’t do so.
In March, Ingram was sentenced to three months in prison after he pleaded guilty to one count of false bankruptcy declaration in another federal case in Florida.
In a sentencing memorandum filed Nov. 11, Johnston, the attorney for Ingram, argued against a prison sentence in the Kansas case, saying his client left the three months in prison “humbled, remorseful, and medically fragile.” He was assaulted by other inmates and his health declined during the time in prison, Johnston wrote.
Ingram has begun paying victims by surrendering property, cash and vehicles through bankruptcy proceedings, the memorandum said.
“At 73 years old, Mr. Ingram’s severe health conditions would render any lengthy period of incarceration equivalent to a sentence of life imprisonment,” Johnston wrote.
