Assistant U.S. Attorney John J. Field, who handled the case, stated that Fleet owned a real estate business from 1997 to 2014 that ultimately came to be known as Cornerstone Homes. Cornerstone’s business involved the purchase, renovation and resale or renting of distressed homes.
In order to acquire the distressed homes, Fleet sold debentures to private investors promising annual rates of return of 8-10 percent. Fleet thereafter caused Cornerstone to borrow approximately $25,000,000 from various banks, and to pledge the houses that had been acquired with private investor money as security for the bank loans.
By March 2010, Fleet knew that Cornerstone’s operating income was insufficient to pay its debt service to the banks and the private investors. The defendant also lost more than $2,000,000 in risky options trades. However, Fleet continued to solicit additional private investments without disclosing Cornerstone’s true financial picture, including the fact that he had more than $2,000,000 of Cornerstone’s capital. In March 2010, Fleet raised approximately $88,000 from approximately 13 investors based upon statements and representations that were materially misleading.
from US Dept. of Justice via IFTTT
