Greater Des Moines developer Randal Walters was sentenced Wednesday to a year and day in federal prison after pleading guilty last year to bank fraud.
Prosecutors had recommended a sentence of about two years of probation during a hearing in September in which Walters pleaded guilty to one of nine charges that were brought against him and business partner John Kline. (Walters and Kline are pictured together in this 2006 photo. Walters is on the left.)
Walters had been charged with diverting funds borrowed for a Des Moines condominium project to pay for a variety of other items and projects.
A consortium of at least ten Iowa and Missouri banks participated in loans to the project.
Chief Judge James Gritzner also sentenced Walters to five years of probation after his release from prison and ordered him to pay $500,000 restitution.
In exchange for his guilty plea to one count of bank fraud, prosecutors dismissed seven counts of wire fraud and an additional count of bank fraud. It was widely believe that Walters would testify against Kline.
However, Kline pleaded guilty last month to two counts of bank fraud. The seven wire fraud counts were dismissed.
Prosecutors recommended a 30-month prison term during the plea hearing, which was held before Judge Gritzner, who will sentence Kline on April 12.
Walters and Kline were partners in Oaks Development Co. and other entities.
Their indictments said that between November 2004 and January 2007, they obtained $4.5 million from First Bank and 10 other Iowa and Missouri lenders who participated in the loan for Meadow Cove condominiums in Des Moines.
They obtained $2.2 million from First National Bank Midwest and one other lender for the Heritage Hills residential development in West Des Moines.
Kline admitted during his plea hearing to using more than $100,000 in advances for the condominium project to partially pay for an investment condominium in Florida and more than $500,000 for Heritage Hills for other business costs.