Rexburg man sentenced to more than 5 years in Federal prison for wire fraud and aggravated identity theft

POCATELLO, IDAHO (KIFI) - Kelly Ryan McCandless, 53, of Rexburg, was sentenced to 65 months in federal prison following his convictions for defrauding his partners out of more than $580,000, U.S.
Attorney Josh Hurwit announced Wednesday.

According to court records, in 2017, McCandless and two others formed a partnership to build a
96-bed student housing property in Rexburg, Idaho. McCandless’s contribution was to build the
property, using a loan secured by the partnership, at cost. In exchange for his efforts, and upon
completion of the project, he would be entitled to 24.5% of the building equity and future proceeds.

Over the course of the next year, however, and beginning with the very first bank withdrawal,
McCandless falsified subcontractor invoices and bank withdrawal requests. He unlawfully used
subcontractors’ signatures to withdraw loan proceeds from the bank at a higher amount than what
was invoiced to build the project. The bank relied on those documents and wired McCandless the
proceeds from the loan. McCandless continued this scheme for months and improperly took
approximately $580,000, which he used to purchase personal items like a brand-new pickup truck,
several snowmobiles, several dirt bikes, toy haulers, a Jeep, a Jeep Grand Cherokee, $5,000 in
dental work, vacations, among other expenditures. His actions caused the project to come to a
standstill, and but for one of the partners injecting more capital into the project, the student housing
property would never have been completed.

After a six-day jury trial, McCandless was found guilty of four counts of wire fraud and four counts
of aggravated identity theft on November 29, 2023.

Chief U.S. District Judge David C. Nye also ordered McCandless to pay a $10,000 fine and to
serve three years of supervised release following his prison sentence.

“The defendant defrauded partners who put their trust in him and spent the funds he stole on a
lifestyle he could not legitimately afford,” said U.S. Attorney Hurwit. “We will not tolerate this
illegal conduct, which truly harms victims and threatens our local economies. I’m grateful for the
FBI’s hard work in this case, and we thank the jury for its service.”

“Like many fraudsters, McCandless was motivated by greed, lining his pockets with the embezzled
money and spending it on expensive toys for himself,” said Shohini Sinha of the Salt Lake City
FBI. “While he may have benefited in the short term, he will now be held accountable for
betraying and defrauding his victims.”

U.S. Attorney Hurwit commended the work of the FBI, which led to the charges. Assistant U.S.
Attorney David Morse and former Assistant U.S. Attorney John Shirts prosecuted this case.