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Former business owner sentenced for $30M in fraud schemes

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A former Aurora business owner was sentenced to jail time for committing more than $30 million in fraud schemes.

Russell Grundy, 51, now of Hilton Head Island, South Carolina, was sentenced to eight years in federal prison without parole and ordered to pay nearly $15 million in restitution, according to a news release from the office of Tim Garrison, U.S attorney for the Western District of Missouri.

Grundy's companies – including Innovative Objects LLC, PILR Technology LLC, Choice Technologies LLC, Wyerless LLC and Audio Input LLC – provided software development, computer security, and hardware and software products for its clients. According to Garrison’s office, his schemes resulted in economic harm to Land O’Lakes Inc. and its Nutra Blend LLC subsidiary; Miami Nation Enterprises, a subsidiary company of the Miami Nation Tribe; and UMB Financial Corp. (Nasdaq: UMBF).

Through Innovative Objects, Grundy defrauded Land O’Lakes and Nutra Blend to the tune of $1.8 million by claiming third-party license fees were needed in software created for the companies. However, Grundy admitted the license requirements did not exist and he kept the money paid for license fees, according to the release.

Related to Land O’Lakes, Grundy applied for three loans from UMB Bank by exaggerating the amount of money the food company would pay for a lease agreement for warehouses. UMB recorded a $4.2 million financial loss from the scheme.

In the scheme involving Miami Nations, Grundy falsely told the tribe his companies had been awarded a multimillion-dollar contract from Walmart Inc. (NYSE: WMT) as part of negotiations by Miami Nation to provide loans and to purchase a controlling interest in Grundy's technology businesses, according to the release.

After being indicted by a federal grand jury for his schemes, Grundy entered a contract for the creation of an app and denied a refund request by the client when it was not completed. He also made false statements on loan documents to Palmetto State Bank in South Carolina, according to court documents.

“This white-collar thief maintained his lavish lifestyle by stealing millions of dollars from his clients, partners and lenders to build expensive homes, buy luxurious cars and take numerous vacations,” Garrison said in the release.

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