WABASH CO./U.S. DISTRICT COURT—Yet another former public official has been indicted in U.S. District (federal) court in Benton, and this one is a very prominent businessman, as well, who has escaped serious charges in the past due to incompetence on the part of a regional prosecutor.
It doesn’t appear Kevin C. Williams will be handled with such kid gloves this time.
Williams, 51, a CPA and investment broker in Mt. Carmel as well as a past trustee of Illinois Eastern Community Colleges, is charged in federal court with misappropriating literally millions of dollars belonging to a local family, the Sponds, over whose accounts he’s had control since 1991, according to court documents.
U.S. Court officials allege that Williams was using Spond money to enrich himself, and this has resulted in official counts of Money Laundering (40 separate counts in all) and Wire Fraud (35 counts in all) that authorities say occurred from 1991 to February 2012.
The indictments were handed down under seal on January 8, 2013, after what was apparently a months-long investigation into this specific case.
However, existing documentation shows that this probably isn’t an isolated case; it’s just one that a complaint was apparently made on, and that complaint was what prompted investigators to begin sorting through the mess that is the Spond estate, bringing about the charges at hand.
The trust funds
Mainstream media has given scant information on the very complicated case.
The real story, however, is twenty years’ worth of alleged subterfuge that shows a pattern of someone becoming very comfortable with alleged misappropriation of someone else’s money.
Court documents show that “E.S.” (Mrs. Spond), an “elderly female resident of Mt. Carmel,” and “C.S.” (Mr. Spond), “the deceased former husband of E.S.,” were “befriended” by Williams years ago.
In 1991, documents show, four separate trusts were created to manage the Sponds’ assets: E.S. Trust, C.S. Trust, Spond Family Life Insurance Trust and Spond Charitable Remainder Unitrust. Williams was the trustee for the life insurance and unitrust.
In the E.S. trust, formed December 19, 1991, both Sponds would serve as trustees. This trust provided that during Mrs. Spond’s life, the funds transferred to the trust would be invested and reinvested, resulting in mandatory monthly income distributions to her during her lifetime.
The C.S. trust established on the same day was set up for the same reason and with the same terms.
The life insurance trust was set up on September 13, 1991 and provided how cash, property and life insurance policies owned by the trust would be distributed to heirs and beneficiaries after the deaths of the Sponds.
The unitrust was set up Dec. 19, 1991, and provided that it would distribute a fixed percentage of the value of its assets to the Sponds on a quarterly basis, and that upon their deaths, the remaining balance would be distributed to charity.
Williams, as a CPA, helped Mrs. Spond manage her personal finances because she struggled with her vision and other complications from her advanced age.
Misappropriation of funds
Court documents explain what responsibilities Williams held as the trust manager and also what his fiduciary duties were toward the trusts.
They then explain what’s called a “scheme to defraud” the Sponds: From on or about Sept. 13, 1991 and continuing through and including Feb. 22, 2012, Williams violated his fiduciary duties and misappropriated money and property belonging to Mrs. Spond, the Spond Family Life Insurance Trust, and the Charitable Remainder trust for his own personal enrichment, but withdrawing money from existing investment accounts and misappropriating money given to him for investment purposes.
Authorities allege Williams:
Withdrew money from existing investments with Lincoln Financial Group, Sun Life of Canada, and AIG without knowledge or consent of Mrs. Spond and used the funds for his own purposes;
Sold a Lincoln Financial life insurance policy, which had $691,474 invested in it, to U.S. Bank for $180,000 and misapplied those funds;
Opened an Old National Bank checking account in 2002 in Mt. Carmel in the name of “Spond Family Trust” and closed it March 24, 2011, withdrawing the balance of funds. He then opened a second checking account in the name of “Spond Family Life Insurance Trust” at First National Bank in Mt. Carmel. All correspondence from the accounts was directed to a PO box Williams alone controlled;
Deposited personal funds received from Mrs. Spond as well as money under his control as trustee into those accounts instead of investing the money. He wrote checks to himself and otherwise transferred money from those accounts to his personal investment and business accounts “for his own enrichment without the knowledge or consent of E.S. or other applicable trust representative.”
Fictitious annuity activity
To conceal the fact that he was misappropriating funds, U.S. authorities allege, Williams supplied Mrs. Spond with fictitious account statements purporting to be from Lincoln Financial Group which falsely showed that her funds had been invested in several annuities owned by the Spond Family Trust.
Authorities state that these statements were “entirely fabricated to falsely verify the existence of funds that had actually been misappropriated.”
The false paperwork lulled Mrs. Spond into believing that her investments were safely invested in annuities when Williams had actually “misapplied the funds for other purposes.”
Documents show that Williams deposited money Mrs. Spond provided as investment principal into the trust checking accounts he controlled, then used those same funds to purchase cashier’s checks payable back to Mrs. Spond, thereby returning small portions of her larger principal investments and passing them off falsely as annuity interest payments.
On occasions when the account balance was insufficient to make the ‘purported’ interest payment, Williams transferred money from his personal or business accounts into the trust checking account, then used those funds to purchase cashier’s checks payable back to Mrs. Spond that were misrepresented as ‘annuity interest payments.’
Stole from employer; changed will; bottom line
Documents show that on other occasions when the account balance was insufficient to make the ‘purported’ interest payments, Williams deposited money “stolen from his employer” into the trust checking accounts to make ‘annuity payments’ to Mrs. Spond.
Authorities termed these “phony interest payments” as “integral to and promoted and concealed the scheme to defraud because those payments lulled Mrs. Spond into believing that her deposits were properly invested and caused her to continue giving Williams money to invest on her behalf.
Williams also is accused of obtaining money by “causing changes to the designated beneficiary on both the Family Life Insurance trust and E.S.’s will so that Williams would personally profit upon E.S.’s death, without the knowledge or consent of E.S. or other applicable trust representative.
The bottom line: “From 1992-2012, Williams fraudulently obtained $1,521,169.34 from E.S. and the related trust accounts,” court documents show. “However, his withdrawal activity caused out-of-pocket loss in the amount of $2,087,630.06 from E.S., and the various trust accounts, by fraud, and in violation of the fiduciary duties applicable to trustees and accountants.”
As well, by causing changes to her will, Williams “stood to gain $1,716,034.00.”
The rest of Wire Fraud; the Money Laundering
The first 35 counts alleged as “Wire Fraud” are laid out in detail in the court documents and date back only to February 12, 2008 (since such fraud can only be charged dating back specifically three years from the date of the original complaint).
Across the 35 separate wire transfers, fund transfers, or checks drawn, ranging in amounts from $450 at the lowest amount to $16,500 at the highest, each shows that Williams either deposited the amounts into his own personal checking accounts (the predominant activity of the 36 transfers), investment account, or to pay his mortgage.
There is no indication of activity prior to Feb. 12, 2008. These 35 counts only amount to $150,802.42 in three years’ time.
Under Count 36, Money Laundering, Williams is accused of engaging in a monetary transaction in criminally-derived property (the wire fraud) of a value greater than $10,000 on Sept. 24, 2009.
The count originates on Sept. 16, 2009, when it’s alleged Williams caused a $25,000 check written on Mrs. Spond’s personal checking account with First Bank to be deposited into the Spond Family Trust Account held by Old National Bank. Then on Sept. 17, 2009, he caused a $15,000 wire transfer from that trust account to be deposited into his personal Sharebuilder investment account held by ING Direct.
Then on Sept. 24, 2009, he wire transferred $14,955 from that account to his business checking account at First National.
Counts 37-40 of the Money Laundering accusations reallege all the previous allegations, and specify that on four separate dates (July 9, August 5 and November 5, 2010; and January 5, 2011), Williams “used proceeds of specified unlawful activity to engage in a financial transaction involving the purchase” of cashier’s checks, $5,000 each time, payable to Mrs. Spond.
Own recog bond
The indictment was handed down under seal Jan. 8, 2013.
An arrest warrant was issued the next day, and on Jan. 10, Williams was taken into custody.
He entered a not guilty plea in front of Judge J. Phil Gilbert in Benton on that day, and was released on a recognizance bond. The terms of his OR bond are very severe: Williams apparently hadn’t renewed his passport, as the conditions state he cannot obtain one; restrict his travel to the Southern District of Illinois; avoid all contact with any potential witnesses or victims in the case; not possess a firearm or other dangerous weapon; refrain from any use of alcohol or narcotic drug; grant full access to his ‘probation officer’ (the federal court person who is monitoring Williams’ activity between arrest and trial); identify everyone he’s doing tax work for and grant probation access to any financial records he maintains; not enter into any contracts, borrow any money, or obtain any lines of credit without having the express consent of the probation office to do so; not accept or solicit any funds from individuals; not enter into any business relationship with anyone whose tax returns he prepares; and not under any circumstances borrow money from any individual.
Public defender Melissa Day was appointed to Williams on Jan. 10.
He was set for a final pretrial conference in the case March 1 at 9:30, and fast-tracked for a speedy jury trial March 11 at 9 a.m. in Benton.
‘Entrepreneur’
Those who have kept up with Williams’ ridiculous antics over the past several decades know him to have been considered an “entrepreneur,” owning several businesses in and around Wabash and White counties, many of which had several investors involved in them over the years, and many of the investors being sorely disappointed in what Williams provided.
Chief among these are the former Windsor Oaks/Best Western Inn in Grayville, a radio station in Mt. Carmel, and American Auto Center also once located in Mt. Carmel.
It was over American Auto, and sleight-of-hand wrangling of funds from banks located in Indiana, that Williams managed to get into trouble on the state level in 2005.
After a lengthy investigation involving not only Mt. Carmel and Wabash County officials, but also Illinois State Police and Secretary of State Police, Williams was accused of taking in cars at AAC that still had liens on them, obtaining money from banks in Illinois and Indiana in order to pay off the liens…then not paying the liens on the vehicles when a customer traded one for one of his AAC cars.
Complaints came in across 2004 and 2005, until finally Williams was charged with a single count of Theft in Wabash County. Duly-elected prosecutor Chris Quick couldn’t follow through with the charge since he’d used Williams’ CPA services in the past, so the appellate prosecutor’s office stepped in, and unfortunately, David “Rollover” Rands was handed the case.
Rands, who either simply does not care about anything resembling justice or who is enriching himself with payoffs from the public officials he’s taxed with prosecuting on conflict, dismissed the Theft charge in April 2006 with literally no action being taken on it in a year.
Two of Williams’ cohorts in the case, Wayne Muensterman and Micah Mobley, both were charged in the banking aspect of the car loan non-payouts.
Williams/Wankel lead to bankruptcy
In the meantime, another ‘partner’ of Williams’, Mark Wankel who owned Edward Jones in Mt. Carmel, claimed in a civil suit in 2004 and another in 2005 that Williams had defrauded him out of money, to the tune of a million dollars through AAC and other ‘investments.’
The Wankel/Williams civil suit settlement lost Williams a lot of money, and resulted in a December 2006 bankruptcy filing by Williams. In it, he reported liabilities of more than $6.5 million and a monthly net income of a little over $5,500 from the CPA business.
There was, of course, no report of income from being a trustee of a wealthy elderly Mt. Carmel woman’s estate.
Williams left debts (that were ultimately discharged) unpaid to Wankel, his attorney Morris Lane Harvey, numerous banks across several counties (Wabash, White, Saline, Crawford) and two states (Illinois and Indiana) and the IRS and state of Illinois in the form of unpaid taxes.
The bankruptcy was finalized in August 2010.
In 2011, Williams was twice the subject of complaints from parents that their teenage/college age yet-not-quite-drinking-age children were partying at Williams’ Ladue Drive house (which he didn’t lose in the bankruptcy or civil court settlements) with Williams being the one to provide alcohol to them.
On one occasion, police were actually at Williams’ door, but Williams wouldn’t answer, and officers walked away.
How do they live like that?
How Williams continued to get away with alleged crimes remained a matter of speculation among those in Mt. Carmel who’d known that Williams was just “kind of slimy” all along, opining that nothing seemed to stick to him.
Now, with the indictments having been handed down by a federal grand jury, it appears something might actually stick.
And the nature of the allegations has renewed the complete outrage many in Wabash County, who’ve watched Williams play with hundreds of thousands of dollars on a daily basis like they’re quarters and dimes to the average person, feel.
Now questions have arisen as to just how many people may have been victims of such schemes, not just by Williams, but also by others in the area who seem to live so far above their means without visible and viable methods of supporting themselves.
Whether this case will open up examination of just such a thing remains to be seen.