Kathryn L. Cunningham, $1.5M Fraud Scheme, Missouri 2022

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Kathryn L. Cunningham Indicted for $1.5 Million Fraud Scheme in Missouri

A 62-year-old woman from Rocheport, Missouri, has been indicted for her alleged role in a $1.5 million fraud and embezzlement scheme.

Kathryn L. ‘Kat’ Cunningham, the former owner and CEO of Moresource, Inc., a payroll services business in Columbia, Missouri, was charged in a 38-count indictment returned under seal by a federal grand jury in Jefferson City, Missouri, on December 13, 2022. The indictment was unsealed and made public today following Cunningham’s arrest.

The indictment alleges that Cunningham embezzled approximately $1,545,427 of payroll deposits from 24 Moresource clients. She also used money from Moresource’s operating account for her personal use, borrowed money from non-bank lenders to cover shortfalls in client funds, and paid the principal and interest on several loans from client funds.

Cunningham allegedly concealed a financial liability when she obtained a guaranteed loan and a line of credit from the Small Business Administration. She caused SBA guaranteed funds to be disbursed into Moresource’s operating account and then transferred into Moresource’s payroll account to replace client funds she had embezzled.

The indictment also alleges that Cunningham embezzled federal funds from Abilities for Business, Inc., an organization of which she was president. She deposited funds embezzled from this organization into Moresource’s payroll account to replace client funds and also deposited funds into her personal bank accounts.

Cunningham attempted to conceal her embezzlement by causing Moresource to stop making timely and accurate IRS filings and to stop making regular payments to the IRS for employment taxes owed by her clients. She sent false documents to clients stating that all payroll tax obligations had been satisfied.

The federal indictment charges Cunningham with 24 counts of bank fraud, four counts of stealing from an organization that receives federal funds, and 10 counts of wire fraud.