Developer Randal Walters pleaded guilty today in federal court to one count of a nine-count indictment that was filed last year in connection with construction projects involving business partner John Kline.
In exchange for the plea to a single count of bank fraud, the U.S. attorney’s office in Des Moines dismissed seven counts of wire fraud and one additional count of bank fraud.
The guilty plea stemmed from Walters’ admitted diversion of a First Bank loan, which he used to make a down payment on a Sarasota, Fla., condominium and to cover a tax bill.
The $4.5 million loan was for the Meadow Cove condominium project in Des Moines. Walters admitted using $220,000 for a down payment on the Florida condominium and $69,000 to pay property taxes in Johnston for an entity known as Griz Lee in Johnston.
Walters could have faced 30 years in prison and beenfined $1 million if found guilty on all nine charges. However, Assistant U.S. Attorney William Purdy said the government would recommend that Walters not serve any prison time and instead be sentenced to a period of supervised release.
Walters will pay restitution of between $400,000 and $1 million.
On a motion from Walters’ attorney Alfredo Parrish, Judge James Gritzner agreed to seal details of the plea agreement. Parrish declined to say why he asked for the agreement to be sealed and would not respond to questions on whether Walters would testify in Kline’s upcoming trial. Purdy also declined to comment further on the plea agreement.
The Business Record reported on Wednesday that Kline’s trial for bank and wire fraud had been delayed until January. Both men were scheduled to stand trial Monday. Kline’s lawyer,Paul Rosenberg, said the trial was delayed because he was having hip surgery.