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Developer Gets Three-Year Federal Prison Term

May 27, 1988

KANSAS CITY, Mo. (AP) _ George P. Kroh, former chairman of a Kansas City-based land development and real estate company, was sentenced to three years in federal prison Friday for fraud.

Kroh, 50, former head of Kroh Brothers Development Co., also was ordered to pay $750,000 in restitution to two banks in the Kansas City area.

Kroh pleaded guilty April 13 under an agreement with prosecutors to three felony counts. He appeared Friday before U.S. District Judge Scott O. Wright, who sentenced Kroh to two concurrent three-year prison terms on fraud counts.

The judge also ordered Kroh to serve five years’ probation on a third count, conspiracy, when the prison term ends.

Federal authorities said Kroh will be eligible for parole after serving one year of the sentence unless it is later reduced by Wright.

The judge ordered Kroh to pay $250,000 to the Kansas City National Bank and Trust Co. of Prairie Village and $500,000 to the Norbank of North Kansas City to make restitution for loans that he obtained by making false financial statements.

Kroh and his brother, John A. Kroh Jr., president of Kroh Brothers Development, owned the prominent 77-year-old company that developed shopping centers, residential areas and office buildings across the country. The company entered bankruptcy proceedings in early 1987 with assets of about $194 million and liabilities of some $201 million.

John Kroh, 47, has been charged with one count of conspiring with his brother to commit bank fraud and 12 counts of bank fraud. He faces a maximum sentence of 81 years in prison and fines totaling $3.25 million.

The fraud counts accused the Krohs of submitting false statements to banks and savings associations in applying for loans to bail the company out of its financial troubles.

Before sentencing Friday, George Kroh told the judge, ″In spite of the hurt and the failures of the past, I consider myself a very fortunate man because I’ve had the full support of my wife, Carolyn, and our three children.″

The judge told Kroh that sentencing him was a ″tough job.″

″Your cooperation makes a big difference in this sentencing and what I do in the future with this case. You did the right thing in deciding to get this behind you and moving forward,″ Wright told Kroh.

During the plea bargain last month, Kroh agreed to testify against other employees of the firm, including his brother.

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