Manager Of Real Estate Investment Company Sentenced To Prison For Multi-Million Dollar Securities Fraud
Defendant Used Investors’ Funds to Support His Lifestyle and to Invest in other Businesses
CHARLOTTE, N.C. – United States District Judge Robert J. Conrad, Jr. today sentenced a Charlotte man to 60 months in prison for his role in a securities fraud scheme involving bogus real estate investments, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Frank Enrique Lleras, 31, was also ordered to serve three years under court supervision after he is released from prison, and to pay $2.7 million dollars in restitution to his victims.
U.S. Attorney Rose is joined in making today’s announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, and Thomas L. Noyes, Inspector in Charge of the Charlotte Division of the U.S. Postal Inspection Service (USPIS).
According to documents filed with the court and today’s sentencing hearing, Lleras was the managing member of Optimum Income Property Investments, LLC (Optimum), a real estate investment company that purported to make money for victim investors by purchasing distressed and foreclosed real estate, and then reselling or leasing those properties. From about 2013 to about 2014, Lleras induced more than 20 victim investors from the Dominican Republic medical community to invest approximately $3,000,000 in the fraudulent real estate scheme. According to court records, to execute the scheme, Lleras established bank accounts in the name of limited liability companies (LLCs) associated with each victim-investor, and then purported to purchase property for each victim in the name of those LLCs.
Court documents also show that to convince his victim investors the scheme was legitimate, Lleras provided fraudulent investment statements showing that victim investors had gained interest on their investments. Lleras also provided fabricated deeds and bogus real estate tax bill receipts, causing victim investors to believe that their funds had been used as promised and that taxes on their properties had been paid. Contrary to promises made to investors, court documents indicate that Lleras did not invest victim investor funds but instead diverted their money to other business ventures and to support his personal lifestyle, including to purchase expensive jewelry.
Lleras pleaded guilty in January 2016 to one count of securities fraud and one count of wire fraud. He will be ordered to report to the Federal Bureau of Prisons to begin serving his sentence upon designation of a federal facility. All federal sentences are served without the possibility of parole.
The investigation of the case was led by the FBI and USPIS. Assistant U.S. Attorney Corey F. Ellis of the U.S. Attorney’s Office in Charlotte prosecuted the case.