Quad Cities Real Estate Developer Pleads Guilty to Investment Fraud Scheme that Resulted in $1.7 Million in Losses
ROCK ISLAND, Ill. – A Rock Island, Ill., businessman, Todd B. Raufeisen, waived indictment and pled guilty to an information that charged him with defrauding investors in his land development and management projects of approximately $1.7 million. Raufeisen, 56, entered his guilty pleas to one count each of wire fraud and money laundering today before U.S. District Judge Sara Darrow. Sentencing is scheduled on Sept. 14, 2017.
In court documents and statements, Raufeisen admitted that from 2010 to August 2016, he engaged in a scheme that defrauded approximately 22 investors in his development projects and resulted in a loss of approximately $1.7 million. Raufeisen engaged in business under various business names, including RDC Hotel Solutions.
As part of the scheme, Raufeisen promised prospective investors a higher rate of interest than conventional, insured investments and short turnarounds on return of the principle and interest. In exchange for the money invested, Raufeisen promised certain investors that the money would be placed in escrow until needed, would only be used for specific development or management projects, and, if unused, the money would be returned to the investor. In fact, Raufeisen used the investors’ money for personal expenses and to pay previous investors to whom he was indebted.
Further, Raufeisen provided certain investors with promissory notes that promised repayment of invested principle and interest. The notes were purportedly signed and guaranteed by persons who knew nothing of the promissory notes and had not guaranteed repayment to the investors. In fact, Raufeisen admitted that he forged the signatures on the promissory notes.
The Internal Revenue Service Criminal Investigation Division; Federal Bureau of Investigation; and, the Office of the Illinois Secretary of State conducted the investigation. Assistant U.S. Attorney Donald Allegro is prosecuting the case on behalf of the government.
The maximum statutory penalties for the offenses - 20 years in prison for wire fraud; 10 years for money laundering - are provided here for informational purposes, as final sentencing is determined by the court based on the advisory Sentencing Guidelines and other statutory factors. The court may also order the defendant to pay restitution to victims of the offenses.