Waterloo ag supplier pleads guilty to bank fraud

CEDAR RAPIDS - A Waterloo agricultural supplier who had evaded Iowa authorities by living in Brazil for nearly four years after being indicted pleaded guilty Monday to a federal bank fraud charge.

Kelly Freese, 52, was charged last month with four counts of bank fraud and one count of making false statements to a bank. He pleaded guilty to only one of the bank fraud charges Monday in U.S. District Court.

Freese, owner and operator of the Christy Corp. in Waterloo, during the hearing admitted to selling assets and inflating the company's accounts receivables that were used as collateral to get a $1,035,687 loan from Lincoln Savings Bank in Cedar Falls in 1998.

Freese's primary business operations were in the agricultural industry, spreading lime and chemicals on farm fields. But the company also handled snow removal, trucking and sales of used farming equipment, documents show. Christy Corp. also did business as Freese Ag Services and Ag-Zone.

The plea agreement shows Freese inflated the value of accounts receivable to falsely claim the company was owed more than $260,000 - when it was really owed $115,000.

Freese also sold equipment pledged as collateral, according to the plea. For example, he sold equipment to Ag-Zone, a company formed by his wife and his parents, who in turn sold the equipment at auctions and gave the proceeds to Freese. Christy Corp. failed to repay the money it had borrowed, causing a loss to the bank of $541,911, records show.

The equipment, including conveyors, tractors, dump trucks, pickup trucks, road graders and forklifts, was valued at more than $1.1 million. It had been transferred to Ag-Zone, and some was sold to third parties, records show.

Freese, indicted in November 2012, was living with his family in Brazil and was arrested several months ago but fought extradition to Iowa, prosecutors said last month. He was returned June 18 to Cedar Rapids.

Freese remains in custody pending sentencing. He faces up to 30 years in federal prison and a fine of at least $1 million.