A Jefferson City contractor was charged with bank fraud earlier this month after they allegedly misappropriated a loan to build a kitchen onto to a Columbia middle school.

A grand jury charged Anthony Adrian, president of J.C. Industries, with two counts of bank fraud on Feb. 13 in the U.S. District Court for the Western District of Missouri. If convicted, Adrian could face up to 30 years in prison, a fine of $1 million, and be forced to pay restitution of at least $1.2 million.

On July 1, 2014, Adrian agreed to build a kitchen addition onto Lange Middle School at 2201 Smiley Lane. The $1.8 million project was part of a $50 million bond issue approved by voters in 2012 that also paid for construction of the neighboring Center for Early Learning.

Adrian agreed to a $1.37 million commercial loan from Hawthorn Bank in Jefferson City to finance the project on Aug. 1, 2014, according to an indictment. That day prosecutors allege Adrian submitted receipts seeking disbursement of $439,475 from the loan. The indictment says Adrian falsely claimed at the time that J.C. Industries spent $98,000 on food service equipment.

"JCI had not made such expenditure," the indictment stated.

On Nov. 3, 2014, Adrian sought $163,505 in loan proceeds. The indictment alleges he falsely claimed J.C. Industries spent money on food service equipment, roofing, sheet metal, door frames, hardware, drywall, ceilings and on-site concrete paving.

"Adrian falsely stated that the Lange Project was proceeding on or near budget and failed to disclose that Adrian used a substantial portion of the loan proceeds to pay subcontractors for work performed in prior, unrelated construction projects," the indictment said.

Adrian's attorney Chris Slusher did not return calls seeking comment.

By November 2014, Adrian spent all of the money from the loan and did not have enough money to complete the project. In all, he allegedly defrauded Hawthorn Bank in the amount of $691,341.67.

Eventually the project was finished.

The district paid J.C. Industries $150,000 for dirt and concrete work it completed. Eventually the Columbia Board of Education approved a contract for the remaining work with Berkley Insurance Co., the insurer on the bonds. Berkley hired GBH Builders of Jefferson City to finish the work.

Taxpayers did not pay any extra money for the project, Columbia Public Schools spokeswoman Michelle Baumstark said.

"That's why you have insurance," Baumstark said.

Adrian and his wife filed for Chapter 7 Bankruptcy protection in September 2016. At the time they listed $299,611.27 in total property owned and $16.1 million in liabilities. Adrian also owed $232,379.27 in back taxes to the government, according to bankruptcy filings. At the time Adrian owned just $67,000 in real estate.

The case was ultimately resolved in February 2018 when $56,000 was disbursed to creditors.

Before the firm closed, J.C. Industries completed projects like upgrades to Jefferson City's Adkins Stadium and Pioneer Trail Elementary School, according to the Jefferson City News Tribune. When the contractor abruptly folded in February 2017, it employed 75 people and was in the midst of a sewer upgrade in Jefferson City and improvements to Highway 50, the News Tribune reported.

The alleged fraud slowed the progress of the Lange Middle School project about three to four months, but it did not significantly impact the school, Baumstark said.

"One of the reasons why they were building the bigger kitchen is we were also going to use it for the Center for Early Learning," Baumstark said. "We did not open the center until early 2017.

A trial is scheduled for March 25 in Jefferson City.