Charge: Eastern KY business used fake financial records to get loans, investments
The operators of an Eastern Kentucky business inflated production figures and created false financial reports to fraudulently get money from investors and lenders, a federal grand jury has charged.
The grand jury indicted Douglas William Vance and Molly Irene McKinnon last week on charges of wire fraud and conspiracy to commit wire fraud and money laundering.
Vance and McKinnon operated Nex-Gen Industries Inc., at the industrial park near Hazard, according to the indictment.
The business ostensibly made product that included biochar, a substance produced through a process that breaks down organic material in a way that leaves much of the carbon in the material.
It has several potential uses, including improving nutrient absorption in soil and storing carbon.
Vance and McKinnon, who also created a business called NexGen Energy Partners, solicited investments and loans under the false pretense that the businesses were more successful than they were, the indictment said.
Vance and McKinnon allegedly created false banking records and false orders for their products and gave them to investors and lenders.
The two paid out relatively small amounts of money to investors at times to get them to put more money into the venture, the indictment charged.
Vance and McKinnon used some money they received for purposes not related to the business, including personal spending and debt, the indictment said.
The document did not say how much money was involved in the alleged fraud.
Vance and McKinnon are scheduled to an initial appearance next month in U.S. District Court in Lexington. The charges are punishable by up to 20 years in prison.
This story was originally published June 22, 2020 at 1:51 PM.
