When real estate developer Kent Lindemuth bought scores of handguns while he was in bankruptcy tied to his real estate holdings, he thought he was spending money that was exempt from bankruptcy proceedings, his defense attorneys contend in a court document.
This is the first time Lindemuth’s defense attorneys have tipped their hand as to their client’s defense in the bankruptcy fraud case in U.S. District Court.
Of the 115 federal counts Lindemuth faces, 103 involve bankruptcy fraud, each tied to the purchase of a handgun between Aug. 19, 2013, and Dec. 29, 2014. His firearm purchases totalled $80,000. Lindemuth was indicted on the charges June 1, 2016.
The indictment said Lindemuth bought the pistols without disclosing the firearms or the money used to buy them to his creditors or the U.S. bankruptcy trustee.
On Dec. 14, an expanded indictment added 12 more charges: four counts of bankruptcy fraud, six counts of money laundering and one count each of receipt of ammunition and receipt of firearms.
In all, prosecutors contend, Lindemuth had concealed financial accounts, two Ford Mustangs and the firearms valued at a total of $2.07 million, according to court records.
Lindemuth’s federal court trial is set to begin May 9.
His defense surfaced in a motion asking U.S. District Judge Daniel Crabtree to disclose the transcripts of a federal grand jury.
Details of grand jury proceedings normally are closed, but the judge can order the release of transcripts sought in this case if grounds may exist for a dismissal of the indictment or a particularized need is shown, Lindemuth’s attorneys said in a motion filed Feb. 17.
The Topeka office of the FBI began investigating the bankruptcy fraud allegations in March 2015 based on the alleged concealment of firearms purchased during the pending bankruptcy proceedings. On Nov. 9, 2012, Lindemuth filed six bankruptcies — five tied to real estate corporations and one personal bankruptcy, the defense motion said.
The final bankruptcy plan was approved in October 2014.
Lindemuth also owned several businesses not involving real estate, including A&A truck rental, which was a partnership with Curt Cochran, and A&A Mini Storage West and South.
On April 30, 2015, an FBI agent interviewed Lindemuth about his purchase of firearms in the two previous years and whether he should have disclosed the firearms to the bankruptcy court.
Lindemuth “generally agreed” he bought numerous firearms but said he wasn’t required to report the purchases because the guns were bought with “proceeds from his non-real estate businesses,” including the storage and truck rental companies, the motion said.
Lindemuth told the agent the non-real estate businesses were neither part of his bankruptcies nor the reporting requirements for the bankruptcies and “the proceeds from the businesses were his to spend or reinvest in the businesses as he saw fit,” the motion said.
On May 12, 2015, the FBI agent interviewed Jim Lloyd, a business consultant in a Kansas City, Mo., firm who had been hired with the bankruptcy court’s permission. Lloyd did financial analysis of the Lindemuth real estate and business operations and assisted creditors in analyzing a workable plan of reorganization, the motion said.
In a report written 14 months later, the FBI agent wrote that Lloyd didn’t provide him with any exculpatory information tied to Lindemuth, the motion said.
But when the defense questioned Lloyd, he said he didn’t consider Lindemuth’s non-real estate businesses, including the storage and truck rental businesses, to be part of the bankruptcies, and the businesses weren’t required to report any business income or expenses to the bankruptcy court, the motion said.
Lloyd said he provided that information to the FBI agent when he was interviewed in May 2015, the motion said.
Lindemuth is seeking the grand jury transcripts because “in order for Mr. Lindemuth to determine whether or not false testimony was presented to the grand jury, Mr. Lindemuth first needs to be able to determine what testimony was given,” the motion said.
A grand jury hears testimony, then can issue an indictment to charge someone. Lindemuth’s attorneys said an indictment could be dismissed if it is based on intentionally false testimony that was material to the grand jury’s decision to return an indictment.
In a Shawnee County District Court case, Lindemuth was convicted on Sept. 28 of threatening an Oklahoma trucking company owner, but acquitted of a second count of the same charge.
Contact reporter Steve Fry at (785) 295-1206 or @TCJCourtsNCrime on Twitter.