GREAT FALLS, Mont. (AP) - The former president of a regional restaurant group has denied four federal charges including allegations that he made fraudulent statements in applying for $1.1 million in loans for the struggling business.
Kenneth Hatzenbeller of Great Falls pleaded not guilty on Nov. 29 to two counts of bank fraud, one count of money laundering and one count of false oath in a bankruptcy proceeding. His trial is set for Feb. 6 before U.S. District Judge Brian Morris in Great Falls.
Hatzenbeller, 65, was indicted on charges that he received a $500,000 loan from Utah-based Zions Bank in September 2014 by falsely saying he needed the money to purchase furniture, fixtures and equipment for restaurants in Idaho and Washington. He then is accused of submitting fraudulent invoices to withdraw the loaned funds.
He also is accused of applying for a $600,000 loan from Yellowstone Bank by fraudulently saying he planned to open a Chili’s restaurant in Billings. He received the loan shortly before Shoot the Moon LLC - the restaurant group he co-owned - filed for Chapter 11 bankruptcy reorganization in October 2015.
He also is charged with making a false statement in the bankruptcy proceeding by saying a $490,000 deposit was a loan to Shoot the Moon LLC. Court documents do not offer further details on that or a money laundering charge.
Hatzenbeller’s attorneys in the federal case did not respond to emails from The Associated Press seeking comment Wednesday.
The company listed almost $23 million in assets and almost $25 million in liabilities in its bankruptcy filing. It later sold its 11 Chili’s restaurants in Montana, Idaho and eastern Washington for $12.5 million.
Hatzenbeller also faces state securities fraud charges for allegedly soliciting $4.5 million from 15 investors without telling them the business was struggling and without registering the investments with state regulators. He has pleaded not guilty.
The charges the state auditor’s office filed in June allege Hatzenbeller failed to repay $3.3 million to investors. Two of the charges allege Hatzenbeller took money from “vulnerable persons” over the age of 60 including $625,000 from a couple and $500,000 from a man who was older than 70 and failed to fully repay them.
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