FOR IMMEDIATE RELEASE
Thursday, February 28, 2008
KEVIN KRISTEN O’CONNELL ARRAIGNED AND PLEADS GUILTY IN U.S. FEDERAL COURT
Bill Mercer, United States Attorney for the District of Montana, announced today that during a federal court session in Great Falls on February 28, 2008, before U.S. Magistrate Judge Keith Strong, KEVIN KRISTEN O'CONNELL, a 33-year-old resident of Buffalo, New York, was arraigned and pled guilty to credit card fraud. Sentencing is set for June 2, 2008. He is currently released on special conditions.
In an Offer of Proof filed by the United States, the government stated it would have proved at trial the following:
O'CONNELL was the chef at the Grand Union Hotel in Fort Benton. Sometime in 2002 he left the employment of the Grand Union and in December of 2002, O'CONNELL and two partners, opened a joint business account at Heritage Bank in the name of "Blue Smoke" for the purpose of funding a restaurant known as the Indigo Lounge in Great Falls. The account was only accessible to O'CONNELL and one of his business partners.
From October 26, 2003, through May 23, 2005, the credit card processing company known as NOVA was utilized by the Indigo Lounge to process all credit card purchases. During the time NOVA was utilized by the Indigo Lounge, the following unauthorized purchases were made to the benefit of the business:
On March 2, 2005, a corporate credit card registered to a pharmaceutical sales rep from Eli, Lilly and Company, was used to pay for a banquet dinner at the Indigo Lounge. The card was legitimately charged $1,571 for the banquet. Several days after the event, on March 8, 2005, the card was again charged, this time fraudulently, to obtain $3,142 from the credit card account.
In March of 2005, a corporate card registered to an employee of the Burlington Northern Sante Fe Railroad was used to pay for an event at the Indigo Lounge. The card was legitimately charged $2,870 for the catering service. On March 11, 2005, the card was fraudulently charged two more times taking another $5,120 from that corporate account.
Consequently, NOVA canceled their contract with the Indigo Lounge to provide credit card services. The Indigo Lounge then contracted with Heartland Payment Systems to provide credit card services. The following transactions occurred:
A vendor who had a business arrangement with O'CONNELL to sell wines from her winery to the Indigo Lounge occasionally dined at the Indigo Lounge in 2004 and 2005. On June 24, 2005, her VISA credit card account was charged $2,615, even though she had not patronized the restaurant for some time prior to that day and never for that amount.
In December of 2004, a local dentist held a Christmas dinner banquet at the Indigo Lounge for his office staff and co-workers. The banquet cost the dentist $800, which he charged to his Mastercard credit card. Six months later, on June 27, 2005, the same credit card account was fraudulently charged $2,615.
On May 23, 2005, a local businessman used his corporate American Express credit card to pay for a luncheon at the Indigo Lounge. The account was legitimately charged $105 for the luncheon. The following day the same corporate credit card account was fraudulently charged $3,127.50. On May 25, 2005, the same account was fraudulently charged $4,260. On June 1, 2005, the same account was fraudulently charged $3,415. On June 9, 2005, the same card was fraudulently charged $3,417. On June 19, 2005, the account was fraudulently charged $3,417. On June 22, 2005, the same card was charged $3,415. On June 23, 2005, the same business account was fraudulently charged $3,816 and $3,127.50; and finally, on June 24, 2005, the same card was fraudulently charged $2,712.
A review of the bank account records for the Indigo Lounge indicate that after each fraudulent credit card transaction described above, O'CONNELL would write checks off the account and deplete, generally, the entire amount of the fraudulently obtained and deposited funds.
The total amount of the fraudulent credit card account transactions was $44,209.
O'CONNELL faces possible penalties of 10 years in prison, a $250,000 fine and 3 years supervised release.
Assistant U.S. Attorney Carl E. Rostad prosecuted the case for the United States.
The investigation was a cooperative effort between the U.S. Immigration and Customs Enforcement and the Great Falls Police Department.
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A copy of the Offer of Proof can be obtained by contacting Sally Frank at (406) 247-4638.
