A former Aurora resident who operated a handful of local businesses was indicted and arrested for alleged fraud schemes totaling over $26 million.
Russell Grundy, 48, now of Hilton Head Island, South Carolina, was charged in a 30-count indictment returned by a Springfield federal grand jury on July 11. He was arrested yesterday, according to a news release from the office of Tom Larson, acting U.S. attorney for the Western District of Missouri.
Grundy’s companies, which handled software development, computer security, and hardware and software technologies, operates under the names Innovative Objects LLC, PILR Technology LLC, Choice Technologies LLC, Wyerless LLC and Audio Input LLC.
The release cites two alleged wire fraud schemes involving Miami Nation Enterprises and Land O’Lakes Inc., and its subsidiary Nutra Blend LLC, as well as charges of money laundering and falsifying loan documents.
Grundy allegedly defrauded Miami Nation Enterprises, a political economic subdivision of the Miami Tribe of Oklahoma, to the tune of nearly $6 million, according to the release.
According to the indictment, Grundy engaged Miami Nation Enterprises to provide loans and buy a controlling interest in his technology-based companies.
Grundy allegedly delivered false reports that his companies were awarded a $3.5 million contract from Wal-Mart Stores Inc. to development and provide information technology services. Miami Nation loaned Grundy the money to cover associated costs from May 19, 2014, to June 24, 2015. On Aug. 24, 2014, Miami Nation bought a 70 percent interest in Grundy’s companies, according to the release.
Miami Nation later discovered Grundy and his companies had not been awarded a Wal-Mart contract and that he fraudulently created emails and documents to support the notion the arrangement with the retailer existed, according to the indictment.
In the alleged fraud against Land O’Lakes, the agricultural cooperative contracted Grundy via Innovative Objects from January 2004 through Sept. 27, 2015, to create proprietary product disbursement software.
Grundy allegedly told Land O’Lakes payments to third-party software programs were necessary in the process, but in actuality there were no third-party licensing fees. He instead allegedly kept those payments for personal or unrelated expenses, according to the release.
That resulted in $862,856 in losses to Land O’Lakes, according to the indictment.
On top of the wire fraud counts, Grundy also is being charged with 10 counts of money laundering, as well as making false statements on loan applications with UMB Bank and People’s Bank of Seneca. The loan amounts totaled over $13 million, according to the release.
The indictment includes a forfeiture clause that could require Grundy to give to the government the $26 million that’s part of the alleged wire fraud schemes and any property obtained through alleged illegal activities.
