Developer in St. Louis, MO guilty of Fraud

Clayton Hargrove, a St. Louis, MO developer has pleaded guilty to fraud for his involvement in a ten million dollar commercial renovation loan. The United States Attorney’s Office on May 4th stated that Mr. Hargrove diverted funds intended to renovate a downtown building into condominiums and office space.

Great Southern Bank, based in Springfield, MO approved a loan for Mr. Hargrave in 2006. The loan in the amount of ten million dollars was to renovate the property located at 1511 Washington Avenue. The property was to be turned into a two story commercial space with five stories of condominiums. The time frame was to be seven months.

Mr. Hargrave informed Great Southern Bank that some of the condominiums had already been pre-sold and the he would be placing a restaurant that he owned into a rental space within the building. The project however continuously ran over budget and behind schedule.

Legacy Building Group based in St. Louis was fired by Mr. Hargrave as the projects contractor and replaced the company with Ashley Architecture. Ashley Architecture is owned by Mr. Hargrave according to the indictment.

Great Southern Bank in 2006 transfer over two hundred eight six thousand dollars to K&B Galleries LTD, a Chicago sub-contractor involved in the project. Mr. Hargrave however had re-negotiated the cost associated with the sub-contractor to two hundred and five thousand dollars. The sub-contractor sent the overage to Mr. Hargrave.

Mr. Hargrave also had another sub-contractor, SEJ Partnership based in Milwaukee redirect overages in the amount of sixty six thousand dollars to his sister in Minnesota. The money according to the indictment went to pay off other projects, investors in his projects and creditors.

Great Southern Bank took over the Washington Avenue project in 2007 and hired another contractor to renovate the building. The bank is still owed three million dollars in regard to the loan.

Mr. Hargrave, age 53 is scheduled for sentencing on July 29th. He faces a sentence of twenty years in prison and a fine of two hundred fifty thousand dollars.

bookmark bookmark bookmark bookmark bookmark bookmark bookmark bookmark bookmark bookmark bookmark bookmark
tabs-top  banner ad

Leave a Reply

You must be logged in to post a comment.