A Lawrence builder charged with conspiracy to commit bank fraud in connection with a building boom in Junction City is expected to plead guilty Tuesday in federal court in Topeka.

David Ray Freeman, 45, is scheduled to appear at 10 a.m. Tuesday before Judge Richard Rogers. His change of plea hearing follows Freeman’s initial appearance in court June 8, when he pleaded not guilty to a charge that he took part in a scheme to land development work as the Army planned to station more troops at nearby Fort Riley.

“We anticipate that on that day he will enter a plea of guilty to the information,” said Christine Kenney, an assistant U.S. attorney prosecuting the case.

Prosecuting complaint

Kenney, who formerly served as Douglas County district attorney, said that conditions could change that might affect Freeman’s decision to change his plea. She also declined to discuss factors that might have prompted the movement toward a guilty plea.

In their complaint, prosecutors allege that Freeman conspired to commit bank fraud through a number of moves, including payments in 2006 and 2007 to a member of the Junction City Commission.

Earlier, Freeman and the commissioner had become friends as the city prepared to accommodate the expected troop buildup, prosecutors said. Freeman started searching for investment possibilities in 2004.

Prosecutors have not named the commissioner.

“The allegation here is the money was changing hands with the purpose of influencing a public official in an unlawful way,” said Jim Cross, a spokesman for U.S. Attorney Lanny Welch. “You can call that whatever you want to call it.”

Specifically, the complaint’s information alleges that:

• Freeman had bragged to business partners and others that he had a Junction City commissioner “in his pocket and could get anything through the City Commission.”

• Freeman issued a check, on a business account, for $5,000 to the wife of the Junction City commissioner. That was May 1, 2006.

• Freeman formed Big D Development and Big D Construction, on May 5, 2006, with other Lawrence residents, and that Freeman owned 50 percent of the combined company.

• Freeman issued another check, on a different business’ account, for $5,000 to the Junction City commissioner. That was July 6, 2006.

• Big D received development contracts, in July and August 2006, for Sutter Woods and Sutter Highlands subdivisions in Junction City, worth a total of more than $12 million to Big D.

• In March 2007, Freeman had an assistant draw and cash a check for $9,000, then deliver the cash to the Junction City commissioner at a rest stop between Junction City and Topeka.

• Freeman instructed his assistant to draw and cash checks for less than $10,000, so that the bank would not have to report the amounts to the government.

Severed ties

If convicted, Freeman would face up to 30 years in prison and up to $1 million in fines, plus payment of restitution and forfeiture of property and proceeds.

Larry Sinks, a former partner in Big D Development and Big D Construction, said that he had severed ties with the partnership in March 2008.

“I wasn’t comfortable with all the things that were going on,” Sinks said, who declined to discuss specifics included in the indictment. “All I know is there were some wrongdoings going on and I wanted no part of it.”

In an interview in August 2006, Sinks said that he, Freeman and their partners would be spending up to $60 million to build 504 apartments and to prepare another 538 lots for construction of homes and duplexes in Junction City, all in preparation for an influx of troops and military families connected with nearby Fort Riley.

Now, Sinks said, much of the demand for development hasn’t materialized, and the apartments project never got off the ground.

“There were improper things going on that I didn’t believe in,” Sinks said Friday. “It’s not how I do business. … It just made me uncomfortable.”

Attempts to contact Freeman, his attorney and other business partners were unsuccessful.