Jefferson City, Missouri (KMIZ)
A grand jury indictment alleging $1.5 million in fraud and embezzlement against a Boone County business owner was opened Thursday.
Kathryn L. Cunningham, 62, known as Kat, was indicted on 38 counts by a grand jury in the City of Jefferson on Dec. 13, but the indictment was opened this week. Cunningham of Rocheport was arrested Thursday and had her first court appearance scheduled for that afternoon, according to a release from the federal attorney’s office in Jefferson City.
According to the release, she is the former owner and CEO of Moresource, a payroll company that had about 140 clients when it closed in 2020.
The indictment alleges that Cunningham embezzled from payroll accounts held in trust for the company’s customers. stolen, the federal prosecutor’s office said.
Cunningham also illegally used company funds for personal purposes, the release said. According to her indictment, Cannigam also fraudulently obtained a guaranteed loan and line of credit from the Small Business Administration, which she used to cover up her embezzlement on multiple occasions.
She also ceased to file timely and accurate tax returns with the IRS and ceased to regularly pay the IRS for payroll taxes of clients, the indictment alleges. According to her indictment, Cunningham also embezzled from her Abilities for Business, Inc. organization, later known as Mid-Missouri Business Leadership Network, Inc.
Cunningham is charged with 24 counts of bank fraud, 4 counts of theft from organizations that receive federal funds, and 10 counts of wire fraud.