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Deseret News
FILE: Alan McKee, left, and Gary Anderson, back right, listen to testimony during a preliminary hearing on Thursday, June 2, 2016, at the Scott M. Matheson Courthouse in Salt Lake City.

SALT LAKE CITY — For six years, Alan Dean McKee raked in more than $1.2 million through multiple fraud schemes to pay for three things: An affluent lifestyle for himself and his family, other business ventures, and pills.

Shackled and wearing a blue jail uniform Monday, McKee admits to it all.

"I take full responsibility for this. I am absolutely wrong, 100 percent. I am embarrassed, I am ashamed. I took advantage of Chet (Olsen), who is a close friend, and Mark Brennan, who is also a close friend," McKee said during a sentencing hearing.

"Today I am thinking clearly for the first time in a long time, and I am appalled," he said.

The once prominent businessman pleaded guilty last month to reduced charges stemming from three schemes, including one that involved impersonating high-ranking officials of The Church of Jesus Christ of Latter-day Saints to give credibility to the bogus business ventures.

In the first case, McKee, 56, was accused of bilking an out-of-state construction company of hundreds of thousands of dollars for an industrial development he claimed was backed by the LDS Church, as well as taking hundreds of thousands more from Olsen and Brennan for excess farm equipment that the church was purportedly trying to sell.

Former Utah County Commissioner Gary Jay Anderson was charged alongside McKee in that case and was ordered in June to stand trial. Anderson has pleaded not guilty to the charges and will next appear in court Dec. 9.

In the second case, which was ongoing after he was released on bail in the first case, McKee contracted two companies under false pretenses to help him remove and recycle materials from a 14-mile stretch of railroad that he didn't own.

As part of the plea, McKee agreed to pay the full $1.2 million restitution between Olsen, Brennan, and the Minnesota-based Ames Construction company, unless the outcome of Anderson's case shifts any of the reparation to him.

McKee pleaded guilty to a single second-degree felony count in each case, for which 3rd District Judge Vernice Trease sentenced him to concurrent sentences of one to 15 years in prison, calling McKee's crimes unlike any she has seen.

"I agree with Mr. Olsen, there is some justice that needs to come from a case of this magnitude, or cases of this magnitude," Trease said.

Four counts of communications fraud, a second-degree felony, were dismissed between the two cases as part of McKee's plea deal.

Rebecca Skordas, McKee's attorney, said McKee became addicted to opiates six years ago after receiving a legitimate prescription to take them. As his dependency grew, driving him to seek out progressively larger doses, Skordas said McKee had no insight into the serious nature of his actions and no one to talk to.

"You're a white, middle class, LDS businessman with a prominent position in the community. Drugs are something that other people do," Skordas said.

After going through swift and severe withdrawals in August when he was arrested on the second set of charges and Trease denied him bail in both cases, Skordas said McKee began to understand what had become of his life. It wasn't until after his plea deal was negotiated, however, that McKee confided with her about his addiction, Skordas said.

It still took prolonged discussion to convince McKee to acknowledge his addiction in court, Skordas said, explaining that in some ways his shame related to the drug use is deeper than his shame about the fraud.

Because he was evaluated as a low-risk offender, Skordas asked that McKee be released on probation in order to seek employment to support his family and begin paying restitution.

Olsen, of Benjamin, asked Trease on Monday to instead keep his former friend behind bars.

"Al McKee set out to steal money from me and my family from the beginning, I know that now," Olsen said. "I will be paying off these debts for years to come, and he should be in prison for those years."

Olsen marvelled at the effort that went into the scam, including long lists of supposed inventory and serial numbers, and expressed his doubt that McKee would make any effort to pay restitution if released. He said that he has worked hard all his life for what he has, and McKee should have done the same.

"To Al I ask, ‘Was it worth it?’" Olsen said. "Admit what you've done and make things right."

In his statement, McKee said he agreed with Olsen.

"Chet was absolutely right when he said it is time for me to stand up and take responsibility for this, and I do," McKee said.

McKee told Trease he was prepared to accept whatever sentence she handed down Monday but implied that he would like to be released in order to begin working and paying restitution.

Asking that McKee be sentenced to prison, prosecutor Brian Williams noted that McKee's former business is "in shambles" and he has no way to begin paying restitution. He also emphasized McKee's continued fraud after his first release from jail.

"One arrest wasn't enough, he had to be locked up and in custody, and at that point, things started to come to the surface and he began to admit what happened," Williams said.

McKee's schemes left "a wake of victims," Williams said, saying he believes as many as 3,000 counts of communication fraud could have been filed against him.

"Even within his individual crimes, the nature and complexity of them shows that he needs to spend a significant time incarcerated," Williams said.

According to court documents, McKee became involved with a possible large-scale industrial development near Elberta, Utah County, in 2012. Early the next year he met with Ames Construction and the Suburban Land Reserve, a real estate development arm of the LDS Church.

However, when the Suburban Land Reserve declined to sign on to the project later that year, McKee continued to work with Brennan, an Ames board member, as if the development was getting underway and was backed by the church, according to plea documents. Through fall 2015, McKee used text messages, emails and phone calls to pose as Eric Peling, a supposed employee of the Suburban Land Reserve, to perpetuate the scheme.

"Through these communications, Brennan was led to believe that Gary Stevenson, the presiding bishop of the LDS Church (at the time), other high-ranking church officials, and high-ranking state officials such as the governor of Utah were assisting McKee to make sure the project moved forward," court documents state.

Anderson, under McKee's instruction, called Brennan posing as Bishop Stevenson, according to court documents. Anderson began working for McKee as a consultant after leaving office, the plea document states, and emailed Brennan at McKee's request telling him he was meeting with LDS officials about the project.

McKee also told Brennan and Olsen he could sell them discounted farm equipment from an LDS Church-owned welfare farm or a fictional company called Associated Land Brokers.

Even as he was facing charges in the first case, prosecutors say McKee was continuing a second scheme he began in August 2015.

In the plea, McKee admitted to contracting with Utah-based R&R Equipment to remove 14 miles of railroad from the Tintic Rail Line near Elberta, claiming to own the section that actually belonged to Union Pacific Railroad. The contract would pay $130,000 to McKee as the line was removed.

R&R brought on another company, Green Box Recycling, to help remove the ties, track and other materials from the line. The removed rail was in turn sold to Utah Fabrication, the plea states. The process continued until May 2016 when Union Pacific discovered the 7 miles of track that had been removed. The removed track was valued at $175,000.