About Us  > Blog

Anatomy of Prosper’s Involvement in the Recent Fraud Conviction

by Prosper on 03/5/08

At Prosper Days 2008 Chris Larsen announced the 1st conviction for fraud in which Prosper as been involved. Citing this newspaper article from the news tribune (Lakewood man off to prison for bank fraud.) Many people have asked how this fraud was allowed to occur; what actions Prosper took to facilitate the conviction; and the precautions taken to mitigate future occurrences.

All transactions were reviewed for risk and Mr. Kilen was contacted prior to authorization of his transfers (both before and after Prosper became aware of the investigation.) Prior to Prosper’s knowledge of the investigation transactions were allowed because the transactions posed no risk to any Prosper member’s money and were deemed to be minor risk to Prosper. Additionally, the transfers were allowed in this case (as opposed to similar cases where they were stopped) because they were initiated from Key bank offices by a bank employee. Additional controls have been put in place to reduce the likelihood of a similar occurrence.

As for Prosper’s involvement in the case, after being contacted by authorities about the illegal activity in which Mr. Kilen was involved, Prosper cooperated fully with federal investigators — providing a significant portion of the evidence used to locate and prosecute Mr. Kilen.

Mr Kilen was ordered by the courts to pay restitution to Prosper and Key Bank (the victims) as part of his sentencing.

Prosper is committed to providing a safe and secure marketplace. Prosper members can trust that Prosper will facilitate the prosecution of criminals to the fullest extent of the law. Prosper is not a safe haven for crooks and thieves.

Leave a Comment

Prosper moderates all comments and will approve those that are directly relevant to the post. We do not publish comments that are spam, are offensive or appear to pass you off as another person.

(required) Email will not be published.

Comment Policy


To prove you're a person (not a spam script), type the security word shown in the picture. Click on the picture to hear an audio file of the word.
Click to hear an audio file of the anti-spam word

4 Responses

zcommodore | March 5th, 2008 at 12:09 pm

It is my understanding that this lender bid on a few loans. Is that money being returned to the victim(s) as payments are made?

RateLadder | March 5th, 2008 at 5:53 pm


Excellent question… I have updated the post with the response.

“Mr Kilen was ordered by the courts to pay restitution to Prosper and Key Bank (the victims) as part of his sentencing.”

Torrey | March 16th, 2008 at 8:21 am

My first comment was deleted? Strange.

As one of the borrowers who received the funds via this lender, I ask:

Are my payments going directly to the victims, plus interest?

I understand he is ordered to repay the victims, but I want to know where the funds that go to Prosper are being routed. Thank you!


RateLadder | March 16th, 2008 at 8:27 pm

Your payments are distributed to all lenders on your loan. Mr. Kilen’s portion of the payments are in now being handed in accordance with the court’s instructions.

posted in Prosper News 4 comments »

Connect with us


Monthly Archive

Notice: Blogs and other materials posted on or linked from this page that use the name "Prosper" generally use that name to refer to Prosper Marketplace, Inc. if published before January 31, 2013 and to refer to Prosper Funding LLC if published on or after February 1, 2013.