Lawrence businessman indicted in $15 million bank loan scheme
A Lawrence businessman has been charged for his alleged role in a $15 million bank loan scheme, federal officials announced.
In an indictment filed Friday in U.S. District Court in Kansas, a grand jury charged Troy A. Gregory, 50, with one count of conspiracy to commit bank fraud, four counts of bank fraud and two counts of making false statements in bank records, according to the indictment.
At the time of the alleged crimes — almost a decade ago — Gregory was a Lawrence resident and an executive and loan officer at Lawrence’s University National Bank, according to the indictment.
The U.S. Department of Justice said in a news release that the bank fraud scheme was to obtain a $15 million construction loan from 26 Kansas banks based on allegedly false information contained in the loan documents.
Gregory, who has yet to make his first appearance in court, “categorically denies” the allegations, according to a statement provided by his attorney, Jim Eisenbrandt.
“These baseless charges involve a loan to build apartments made in April 2008 that was fully performing when he left the bank in July 2009,” Eisenbrandt said in the statement. “The apartments were built, making money, and the loan was being paid. The indictment is based upon false allegations by convicted felons who are seeking favors from the government.”
Eisenbrandt on Friday declined to comment further on the case or the stated false allegations.
According to the news release, the indictment alleges that:
Gregory, while at University National Bank, made millions of dollars in loans to a group of borrowers that were struggling to make payments on the loans. Beginning around late 2007, Gregory began the process of making a $15.2 million construction loan to that same group of borrowers to build an apartment complex in Junction City. Gregory’s bank shared this loan with 25 other Kansas banks.
Gregory allegedly made or caused other people to make false statements to the banks about the strength of the borrowers, the debt status of the apartment property and the existence of about $1.7 million in certificates of deposit for collateral on the loan, all to get the loan approved.
Instead of using the loan funds promised for building the apartments, Gregory allegedly immediately diverted over $1 million of the loan to pay for part of the certificates of deposit pledged as collateral, pay off debt on the apartment property and make payments on unrelated loans. Other Kansas banks that shared in this loan allegedly would not have participated in the loan without the false representations and promises.
The indictment alleges that the banks ultimately wrote off millions of dollars on the $15.2 million construction loan.
Since leaving University National Bank in 2009, Gregory has been a partner with DJT Student Housing Group Inc., according to his LinkedIn profile and the DJT website.
DJT specializes in “off-campus student housing acquisition, repositioning, renovation, consultation and property management,” and has ownership in about 1,220 units in college towns in Kansas and other states, according to the company’s website.
The company’s current apartment projects in Lawrence are Eagle Ridge, Woodward and the Woods of Old West Lawrence, according to the website.
None of DJT’s listed current or past projects are named in the federal indictment against Gregory.