An Anchorage real estate developer admits he lied to a credit union about progress at an apartment complex he was building to get millions of dollars in loan funds.
Lee E. Baker Jr., owner and president of Discovery Construction Inc., pleaded guilty Wednesday to 12 counts of making false statements to Denali Alaskan Federal Credit Union, according to court records.
The credit union approved Baker, 57, for a loan of more than $9.4 million in 2005 to build the proposed 85-unit Bryn Mawr Apartments complex off of Northern Lights Boulevard. But while Baker took money from the loan account, he claimed in misleading reports to the credit union that specific work was being done at the site when little of the planned construction had taken place, according to the U.S. Attorney's Office.
According to the plea agreement filed in court Wednesday, the credit union required certified reports on the project's progress and expenses before Baker could withdraw money from the loan account.
"Specifically, he certified a description of work completed with associated dollar amounts expended, when, in truth and fact, Baker well knew, the documents misrepresented the status of the construction in the draw requests because the work certified was not completed as indicated," wrote federal prosecutors in the plea agreement.
Baker received about $4.3 million before defaulting on the loan, and the apartments were never completed, the prosecutors said. The credit union had spent far more money on the project than it was worth when Baker defaulted, the plea agreement says.
The prosecutors made no sentencing recommendation in the agreement, leaving it to a judge to determine Baker's punishment at a hearing set for December. The maximum penalty is 30 years in prison, a $1 million fine or both, according to the U.S. Attorney's Office.
Reach Casey Grove at firstname.lastname@example.org or 257-4589.