Jury indicts bankrupt Chattanooga developer

Chattanooga contractor and real estate developer Michael A. Dowlen has been indicted by a federal grand jury on 14 counts of interstate transportation of fraudulently obtained money and money laundering, according to court records.

The Jan. 25 indictment alleges that Dowlen, 50, falsified records to defraud Colony Limited Partnership of money intended to finance the construction and development of real estate in Hamilton County.

Records show Dowlen was involved in several developments in Hamilton County, including Channing Creek Townhomes in Chattanooga, AmberBrook Gardens in Hixson and The Palms in East Brainerd.

The indictment states that Dowlen did not fully pay his subcontractors for work they performed and misapplied funds that should have been used to pay them.

He also is charged with falsely representing to some purchasers of his homes that he needed additional funds to complete projects.

Dowlen made his initial court appearance Monday before a U.S. magistrate judge and was released on bond pending an April 4 trial before U.S. District Judge Curtis L. Collier, the release stated. If convicted on all counts, Dowlen could face 140 years in prison and $3.5 million in fines.

Neither Dowlen nor his attorney, Michael Richardson, could be reached for comment Wednesday.

His wife, Carrie, hung up the phone when contacted about the indictment.

John Whitmire, owner of Colony Ltd., declined to comment Wednesday.

Dowlen operated Dowlen Construction LLC since 1996 and Green Oaks LLC since 2000, according to state records.

The indictment alleges that Dowlen transferred stolen, converted and fraudulent checks from a bank account in North Georgia to an account in Chattanooga.

He is accused of misapplying funds obtained under false pretenses to pay for personal expenses, including "trips, vacations, antique automobiles, and gifts," the indictment read.

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He declared personal and business bankruptcy in late 2009, listing eight cars among his personal assets, including two 1970 Plymouth Barracudas and a 1967 Pontiac Firebird, according to court documents.

At the time, Dowlen Construction listed $16.2 million in liabilities and Green Oaks owed $4.2 million, according to court documents. Both companies have since been dissolved.

Dowlen personally owed about $4 million to more than 100 creditors at the time he filed for bankruptcy, the court documents state.

A few months before filing bankruptcy, Dowlen faced foreclosure on at least a dozen unfinished condos in The Palms and other local properties, according to newspaper archives.

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