A federal court has sentenced three people to serve time in prison for their role in a failed housing project in Stone County.
The sentencings are the latest in a series of fines and sentences relating to the Indian Ridge development near Branson West.
David Drake, 76, of Lone Tree, Colorado; Donald D. Snider, 57, of Littleton, Colorado; and Heather A. Gibbs, 54, who is Snider’s wife, were all sentenced in a federal court in Kansas City, Kansas, on Wednesday for their role in committing bank fraud in relation to the Indian Ridge development. The failed development has been dormant since 2009, with several homes still in their unfinished state. Drake and Snider were each sentenced to five years in federal prison, while Gibbs was sentenced to three years probation.
According to a press release from the U.S. Attorney’s office in Kansas, “Drake and Snider pleaded guilty to one count of conspiracy to commit bank fraud and one count of conspiracy to commit money laundering. In their pleas, Drake and Snider admitted they were business partners in a company called Western Site Services that set out to develop land in a project known as Indian Ridge Resorts. They made false representations in order to obtain financing from three banks including Columbian Bank and Trust.”
Gibbs, according to the release, admitted that she knew about fraudulent invoices to the banks, but she did not report the crime.
According to a federal sentencing statement, a Grand Jury found that Drake and Snider withdrew more than $14 million in construction loans from Columbia Bank and Trust, of Topeka, Kansas; Lawrence Bank (now known as Great American Bank), of Lawrence, Kansas; and Wells Fargo Bank (documents do not make clear which branch) for work on Indian Ridge. However, the men’s company did little work on Indian Ridge and, instead, used most of the loan proceeds to repay bank loans for other projects they were involved with in Colorado.
According to court documents, all the Indian Ridge loans were defaulted upon and Columbia Bank failed Aug. 22, 2008, and the loans were placed in receivership by the FDIC. Work came to a halt on the $1.6 billion development because of a lack of funding.
The project began in 2006 under with developer Jim Shirato. Also in 2006, Drake and Snider, under their company North Shore Development, purchased track 34 of Indian Ridge for $3.26 million with the intent to build town homes to be used as vacation properties. Drake and Snider then used another company to recruit “credit partners” to purchase lots for $135,000 each. The partners then obtained construction loans that were funded by Columbia Bank, Lawrence Bank and Wells Fargo. At least 51 such loans were obtained, with 28 of them being held by Columbia, 16 by Wells Fargo and six by Lawrence Bank.
By 2009, Shirato and North Shore Development were trying to find other funding for the project, according to Branson Tri-Lakes News archives.
In 2011, Shirato and Donald Snider pleaded guilty in federal court in Springfield to violating the Missouri Clean Water Act. Shirato was fined $215,000 and Snider was fined $100,000.
“The failure of Indian Ridge Resort and North Shore Investments to abate, control or slow the erosion from the construction site persisted through at least the end of August 2011,” according to a press release at the time from the office of the U.S. Attorney in Missouri’s Western District.
The FDIC purchased the 800-acre property in July 2012 for $3.1 million. The FDIC sold it later that year, but the buyer failed to close. A 25-acre parcel was sold to Jim Jones for $700,000 in 214 and then the rest was sold later that year to Ascent Acquisitions for $1.4 million in July 2014.
Two others had already been sentenced in this case.
Vickie Hall, who is David Drake’s wife, pleaded guilty in 2015 to misprision of a felony, meaning she had knowledge of a felony act and did not report it. As part of a plea agreement, she was sentenced to three years probation.
James B. Clarkson pleaded guilty last year to conspiracy to commit bank fraud. As part of a plea agreement, he was sentenced to two years in federal prison followed by three year of probation. As the mortgage broker, Clarkson made false statements in loan applications be submitted to the banks on behalf of borrowers. According to the indictments, Clarkson submitted loan applications for the credit partners. In some of the loan applications, Clarkson claimed the borrowers made more money than they actually earned, to ensure the loan went through. The indictment also stated that, in loan applications to Columbian and Wells Fargo, Clarkson falsely listed the loan broker as “Shawn Johnson” because Clarkson was not licensed as mortgage broker in Missouri or Kansas.