An Augusta man has been convicted of fraud by a federal jury who found he committed fraud when he borrowed nearly $3 million to refinance an Augusta apartment complex and then filed for bankruptcy protection when facing foreclosure.
Jerome Walter Kiggundu, 37, the registered agent and managing member of Nakaddu LLC, a/k/a Kiggun Properties LLC, was found guilty after a two-day trial in U.S. District Court on charges of bank fraud, bankruptcy fraud and false statements under oath, said David H. Estes, U.S. Attorney for the Southern District of Georgia, according to a news release Wednesday.
Kiggundu faces a sentence of up to 30 years in prison along with substantial fines and restitution, followed by a period of supervised release.
There is no parole in the federal system.
“Jerome Kiggundu spun a web of financial lies to obtain a loan for millions of dollars, and then compounded those falsehoods by committing bankruptcy fraud and lying under oath when he was confronted about it,” Estes said. “Thanks to exceptional investigative work from the FBI and the alertness of the employees at the United States Trustees Program, the jury saw through his fraud and is holding him accountable.”
Kiggundu borrowed $2,831,250 from Red Oak Capital Fund II LLC “by means of materially false and fraudulent pretenses” and submitted, as part of a loan application, “altered Wells Fargo bank statements for the months of October 2018 to December 2018 … which falsely reflected an average monthly operating balance for Nakaddu LLC of approximately $100,000, when in fact the monthly average was $500 or less during this time.”
As collateral to secure the loan, Kiggundu pledged an 80-unit apartment complex located at 405 Hale Street in Augusta, and “falsely listed an ownership interest in 1726 Leona Mitchell Blvd., Enid, Okla., and reported $2,150,000 in equity.”
When the scheme started to unravel, Kiggundu filed for bankruptcy protection under Chapter 11 in an attempt to avoid foreclosure by the lender. Kiggundu then doubled down on his scheme and submitted another set of fake bank statements in his bankruptcy to conceal his bank fraud and cover his tracks. He also lied under oath about his finances when questioned by employees of the United States Trustee Program who suspected this fraud.
“No matter how elaborate or complicated the fraud scheme, the FBI will work to uncover it,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “Kiggundu will now be held accountable for the damage he has done, sending a strong message to anyone considering such fraud that it is a serious crime with serious consequences.”
The case was investigated by the FBI and prosecuted for the United States by Assistant U.S. Attorneys Patrick J. Schwedler and Jennifer A. Stanley.