Purported Louisville Real Estate Investor Charged With Mail Fraud
– Alleged schemes cost investors more than $1.2 million
– Created fictitious addresses and fraudulent mortgage
LOUISVILLE, KY – A federal grand jury meeting in Louisville, Kentucky has indicted a Jefferson County resident with a single count of mail fraud connected to real estate schemes that resulted in the loss of more than $1.2 million to investors, announced David J. Hale, United States Attorney for the Western District of Kentucky.
According to the indictment, between March 1, 2005 and October 31, 2008, Russell N. Daniel, age 63, devised a scheme and an artifice to defraud investors in the defendant’s real estate business and to obtain money and property from investors by means of false and fraudulent pretenses, representations and promises. Specifically, it is alleged that Daniel induced persons to invest in his real estate business by promising returns on investments ranging from 10-15%. Further, the defendant represented that monies invested in his real estate business would be used by him to purchase, and on occasion, rehabilitate houses which in return would be sold for a profit.
It is further alleged that Daniel solicited more than $700,000 to purchase houses purportedly located in Prospect, Shelbyville, Goshen, and Lexington Kentucky as well as Jeffersonville, Indiana, when in fact the addresses were fictitious. The indictment alleges that Daniel used the money received from investors in theses fictitious transactions to fund unrelated matters, including using the investment monies to make payments of promised returns on unrelated investments.
In furtherance of his scheme, between December 28, 2006 and August 14, 2008, it is alleged that Daniel falsely represented to investors in properties located in Louisville, Pleasureville and Lexington, Kentucky, they would receive valid and legally enforceable mortgages on the properties which would provide legal security for their investments, when Daniel provided investors with false and fictitious mortgages totaling more than $530,000 which contained the forged signature of the notary public.
Between March 23, 2005 and May 27, 2009 it is further alleged that Daniel caused $35,000 to be invested with him by falsely representing to investors in the two properties located in Louisville, Kentucky, that the investors would receive valid and legally enforceable first mortgages on the properties which would provide legal security for their investments, when in fact, he did not provide investors with valid and legally enforceable first mortgages.
If convicted, Daniel faces no more than 20 years in prison, a $250,000 fine and a period of three years supervised release. This case is being prosecuted by Assistant United States Attorney Jim Lesousky and was investigated by the Federal Bureau of Investigation.