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Former treasurer faces sentence for wire fraud

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Posted: Wednesday, August 14, 2019 12:00 pm

A former treasurer of the Medina Lake Betterment Association is awaiting sentencing after pleading guilty earlier this year to one of seven wire fraud counts filed against him for an eight-year scheme that allowed him to steal approximately $220,000 from the association, authorities said.

Kenneth Edward Gilmore, 77, signed a plea agreement on March 19 in U.S. District Court pleading guilty to Count One of a seven-court wire fraud indictment brought against him last October, a spokesman for the U.S. Attorney’s office in San Antonio said.

Details of that agreement were not available in the district court’s electronic database.

The indictment against Gilmore said from 2008 until 2016, while he was the treasurer for the betterment association, a community organization that owns and operates the Lakehills Civic Center and puts on the Medina Lake Cajun Festival every year, the defendant developed a scheme that allowed him to steal money from the association through false and misleading treasury reports and to conceal information concerning those thefts from the association.

The count that Gilmore pleaded guilty to stemmed from an Oct. 22, 2013 incident costing the association $1,000, the indictment said.

Daryl Fields, a spokesman for the U.S. Attorney’s office for the Western District of Texas, said Gilmore faces up to 20 years in federal prison for the offense.

U.S. District Judge Xavier Rodriguez, after delaying sentencing once, has rescheduled sentencing for Sept. 4.

Barbara Engel, president of the association, said the losses were “very devastating” for the organization and left board members feeling a sense of embarrassment that they did not keep closer watch over someone they thought they could trust.

“He pulled the wool over everyone’s eyes,” said Engel. “He was a school bus driver and a retired colonel.  You tend to trust those people.”

She said the thefts attributed to Gilmore started small and got bigger over time.  He produced elaborate financial reports that appeared to match the cash inflow and outflow of the organization.

But in fact, he was writing checks to himself from the association’s accounts, the association president said.

“People would have never expected he would have done something like that,” said Engel about a man who reportedly still lives in the Lakehills area.

He currently is free on an unsecured bond that requires him to pay $50,000 if he fails to appear at court or surrender as directed by the court.

Gilmore’s attorney, Oscar L. Cantu Jr., acknowledged that his client had pleaded guilty to one of seven wire fraud complaints and that Gilmore was a retired Air Force colonel and a decorated Vietnam War veteran who had no past criminal record.

“No one would expect a case like this from someone like him,” said Cantu.

He declined to discuss other aspects of the case, other than to say Gilmore has told the court that he will make every effort to see that all the money the association lost in the fraud scheme is accounted for and restored.

“It’s a matter of pride for him,” said Cantu.

Engel said she has heard those promises but so far has not seen any money returned to the association.

“It’s empty promises,” she said.  “Actions speak louder than words.”

Engel also said the association, which drew a big crowd to a 50th anniversary dance at the civic center earlier this month and is planning the 39th annual Medina Lake Cajun Fest for Sept. 28, has rebounded from the losses the fraud scheme created.

It also has implemented financial reporting safeguards to prevent similar problems from arising again and is on “quite solid” financial footing, the president said.

She hopes other nonprofit organizations are aware that they could be threatened by the same kind of schemes.  Engel encourages them to take steps to tighten up on their financial management processes to avoid the hardships her organization faced.

“If we had it to do over again, we’d do things very differently,” said Engel.  “But you’re only stupid if you don’t learn.”

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