On January 7, 2002, Kenneth Payne, the founder and president of Heartland Financial Services, appeared before US District Court Judge John Daniel Tinder and entered a plea of guilty to charges of money laundering and mail fraud brought against him by the United States in conjunction with his operation of Heartland and its related companies.
Payne agreed to a maximum possible term of 21 years and 10 months, reserving the right to argue at his sentencing hearing that the term should be less than the maximum.
Payne will also be ordered to make full restitution, but this order is anticipated to be of little practical value to investors and creditors.
Payne also agreed to cooperate with the government through debriefings concerning all information related to Heartland. It is anticipated that the Receiver’s counsel will conduct a lengthy examination of Payne prior to his sentencing.
Attached hereto are copies of the Memorandum of Plea Agreement and the Factual Basis for Plea submitted by the United States and agreed to by Payne at the hearing.