AUGUSTA, GA: An Augusta man who borrowed nearly $3 million to purchase an Augusta apartment complex, and then filed for bankruptcy protection when facing foreclosure, has been indicted on federal fraud charges.
Jerome Walter Kiggundu, 36, the registered agent and managing member of Nakaddu LLC, a/k/a Kiggun Properties LLC, is charged with Bank Fraud, Bankruptcy Fraud, and False Statements Under Oath, said Bobby L. Christine, U.S. Attorney for the Southern District of Georgia. If convicted, Kiggundu faces a sentence of up to 30 years in prison and substantial fines and restitution, followed by a period of supervised release. There is no parole in the federal system.
“Financial fraud robs communities of legitimate opportunities for growth and development by siphoning off funds that otherwise could have been used for productive purposes,” said U.S. Attorney Christine. “Along with our law enforcement partners, we will aggressively pursue those who would illegally enrich themselves at the expense of their communities.”
According to the indictment, in March 2019, 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, Oklahoma, and reported $2,150,000 in equity.”
Kiggundu then, according to the indictment, filed for bankruptcy protection under Chapter 11 “with the intention of avoiding foreclosure by Red Oak on 405 Hale Street and to conceal the fraudulent actions of the defendant.” The indictment further alleges that Kiggundu again used falsified bank statements in his filing for bankruptcy protection.
“Any fraud in connection with banks or bankruptcy is an erosion of the integrity of the system, and ultimately entire communities are hurt,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “The FBI will continue to work aggressively to make sure only those who honestly seek help in times of need are protected and deserving of that help.”
Criminal indictments contain only charges; defendants are presumed innocent unless and until proven guilty.
The case is being investigated by the FBI and prosecuted for the United States by Special Assistant U.S. Attorney Edwin Caban.