Man Charged with Real Estate Investment Fraud Scheme
Las Vegas, Nev. – A former Las Vegas resident was charged by the Federal Grand Jury today for inducing people to invest in bogus real estate projects in Las Vegas using fraudulent deeds of trust and promises of high returns on their investments, announced Steven W. Myhre, Acting United States Attorney for the District of Nevada.
Gary Lee, age 52, is charged with Conspiracy to Commit Mail Fraud, Conspiracy to Commit Money Laundering, Use of Unauthorized Access Devices, and Criminal Forfeiture. A warrant was issued for Mr. Lee's arrest. If convicted, he faces up to five years in prison and a $250,000 fine on the Conspiracy to Commit Mail Fraud count, up to 20 years in prison and a $500,000 fine on the Conspiracy to Commit Money Laundering Count, up to 10 years in prison and a $250,000 fine on the Use of Unauthorized Access Devices count, and up to $7 million in forfeitures.
According to the court records, it is alleged that from about 1999 to November 2002, Gary Lee and William Kenneth Rick conspired to sell investment opportunities in multiple bogus real estate projects in Las Vegas, Nevada. Lee and Rick falsely represented to victims that their investments would be used to finance specific real estate and construction projects when the defendants knew that the proceeds from the victims' investments were to be used to pay the monthly interest obligations on the victims' investments, as well as interest obligations generated by the victims' and other investors' previous investments. Lee and Rick knowingly caused fraudulent trust deeds, notes, and assignments of interest to be created and provided to the victims, in order to get the victims to believe that their investments were secured by particular real property. Lee and Rick also caused monthly interest payments to be mailed, and otherwise provided to the victims, to maintain the appearance of a successful investment business and to induce victims to invest in other loans. Using this scheme, Lee and Rick caused victims to invest and lose more than $7,000,000 in the phony real estate and construction projects.
There were three non-existent real estate projects for which defendant Lee allegedly solicited investments: the Horito Garage Investment at 2586 Meadows Avenue, Las Vegas; Liberty Motors Investment at 3199 East Charleston Boulevard, Las Vegas; and the El Capitan Trailer Park at 4901 East Bonanza Road, Las Vegas.
William Kenneth Rick, pleaded guilty to Conspiracy and Money Laundering and was sentenced on February 9, 2007, to 50 months in prison and ordered to pay approximately $6.7 million in restitution.
The case is being investigated by IRS Criminal Investigation and prosecuted by Assistant United States Attorney Brian Pugh.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.