The U.S. attorney's office in Des Moines has filed a garnishment notice on a college savings fund in an effort to recover $1.14 million from John Kline, who pleaded guilty earlier this year to two counts of bank fraud and is serving a 2 1/2-year prison term.
When Kline was sentenced in April, he was ordered to pay nearly $1.2 million to banks that loaned money to projects sponsored by Kline and business partner Randal Walters.
Last month, Chief Judge James Gritzner of the U.S. District Court approved applying $9,800 that was seized during the investigation of an arson fire at Kline's former residence in Urbandale toward the restitution.
In a document filed Monday, the U.S. attorney's office said it notified Kline that the balance of the restitution was due, "but the debtor has not paid the amount due."
Kline has paid $29,600 so far.
Federal prosecutors want to garnish a tax-protected college savings fund administered by American Funds of Indianapolis. The amount held in the fund was not available from court documents.
Prosecutors said Kline and Walters illegally used real estate development loans to prop up the finances of other struggling companies. Walters was sentenced to serve one year and one day in federal prison and ordered to pay $500,000 in restitution.