United States Attorney's Office for the District of Idaho

11/30/2023 | Press release | Distributed by Public on 11/30/2023 18:53

Federal Jury Convicts Rexburg Man of Fraud and Aggravated Identity Theft for Stealing from a Construction Partnership

Press Release

Federal Jury Convicts Rexburg Man of Fraud and Aggravated Identity Theft for Stealing from a Construction Partnership

Thursday, November 30, 2023
For Immediate Release
U.S. Attorney's Office, District of Idaho

POCATELLO - A federal jury found Kelly McCandless, 52, of Rexburg, guilty of four counts of wire fraud and four counts of aggravated identity theft after a six-day trial, U.S. Attorney Josh Hurwit announced today. The evidence established that McCandless defrauded his partners in a construction project out of nearly $500,000.

According to court records, in 2017, three individuals formed a partnership with the goal of putting their respective resources and skills together to build a 96-bed student housing property in Rexburg, Idaho. McCandless was one of those three individuals. His contribution was to build the property, using a loan secured by the partnership, at cost. In exchange for his efforts, he would be entitled to 24.5% of the building equity and all future proceeds.

Over the course of the next year, however, and beginning with the very first bank withdrawal, McCandless falsified subcontractor invoices, bank withdrawal requests, and unlawfully used subcontractors' signatures to withdraw loan proceeds from the bank at a higher amount than what was invoiced to build the project. The bank relied on those documents and wired McCandless the proceeds from the loan. McCandless continued this scheme to the tune of nearly $500,000 and used the money to purchase personal items like a brand-new pickup truck, several snow mobiles, several dirt bikes, toy haulers, a Jeep, a Jeep Grand Cherokee, $5,000 in dental work, vacations, etc.

Chief U.S. District Judge David C. Nye accepted the jury's verdict on November 29, 2023, and scheduled McCandless to be sentenced on March 26, 2024, at 11:00 am at the federal courthouse in Pocatello. McCandless faces a mandatory minimum of two, and up to twenty years in federal prison.

"The defendant defrauded partners who put their trust in him and spent the funds he stole on a lifestyle he could not legitimately afford," said U.S. Attorney Hurwit. "We will not tolerate this illegal conduct, which truly harms victims and threatens our local economies. I'm grateful for the FBI's hard work in this case, and we thank the jury for its service."

"Mr. McCandless betrayed his partners' trust, and like most fraudsters, he was simply motivated by greed," said Shohini Sinha, Special Agent in Charge of the Salt Lake City FBI. "Financial fraud has far-reaching consequences, and the FBI and our partners will continue to hold those who engage in these types of schemes accountable."

U.S. Attorney Hurwit commended the work of the Federal Bureau of Investigation, which led to the charges. Assistant U.S. Attorneys David Morse and John Shirts prosecuted this case.

###

Contact

CASSIE FULGHUM

Public Information Officer

(208) 334-1211

Updated November 30, 2023
Topics
Financial Fraud
Identity Theft