Mortgage

Three convicted in Ohio federal court docket on actual property planning

The owners of the Lorraine Hotel in downtown Toledo have been sentenced to several years in prison by a federal judge for launching a $ 3.9 million fraudulent real estate investment program while a third person was given parole.

US District Judge Jack Zouhary sentenced Ronald Wilson, whom prosecutors called "the system's thought leader," to seven and a half years in prison for convicting wire fraud, wire fraud conspiracy, postal fraud, bank fraud, and embezzlement of state property. Ms. Sherri Wilson was sentenced to 3 1/2 years in prison for the same conviction, while Murphy Feeny, an employee of Sierra Real Estate Services, was sentenced to three years probation.

Investigators learned that Ronald Wilson founded Sierra Real Estate in 2015 as a property management company that, according to court records, provides property, property renovation, and tenant management services in the Toledo area. Sherri Wilson was a partner at Sierra Real Estate and Feeny was an employee.

This real estate company was a major owner and principal agent of the Lorraine Hotel, 1117 Jefferson Ave., which was also its base for operations.

The Wilsons and Feeny are alleged to have urged people, mostly outside of northwest Ohio, to enter into a contract with Sierra Real Estate to purchase and renovate rental properties in the Toledo area between September 2016 and April 2019. The victims were told they would retain ownership of the property and receive rental income while the Wilsons and Feeny would manage the property.

Limited liability companies have been established for each investor to manage their investments. However, the defendants never transferred ownership and instead kept control of the LLCs and victims 'funds instead of using investors' funds to complete property renovations.

They withheld income, received rehabilitation project payments and never completed the job, defrauded an insurance company and, according to court records, stole grants from the U.S. Department of Housing and Urban Development intended to benefit low-income tenants of the houses.

The Wilsons opened and controlled more than 100 bank accounts with several financial institutions that received funds and bank deposits from various people. Court documents state that the resulting losses exceeded $ 5 million, but after some payments were sent to the victims, the net loss was estimated at $ 3.9 million.

"In addition to victim investors from around the world, the city of Toledo and its residents continue to suffer. Toledo has gone to great lengths to revitalize parts of the city, including removing destroyed land and rehabilitating others, at a high cost to citizens . " US attorney Justin Herdman wrote in court documents. "Still, many of the properties involved in this case, including a downtown hotel, are derelict and uninhabitable, affecting the value of both the property and the surrounding communities."

Several tenants of these uninhabitable properties have been evicted, the prosecutor said.

Defense attorney John Thebes said Sherri Wilson received a shorter sentence because the judge realized that her husband had taken advantage of her and that she was less to blame for the scheme. She could have been sentenced to 9-11 years in prison under federal sentencing guidelines, while Ronald Wilson faced a maximum of 17 1/2 years.

Messages to the defense attorneys for Ronald Wilson and Feeny were not received.

Filers include First Mercury Insurance, which paid for a $ 32,000 fire on 1140 E. Bancroft St. that Wilsons and Feeny falsely reported the insurer was caused by a fuel can that was fired during the renovation work was stored next to a generator.

The couple received $ 250,790 in vouchers through the Lucas Metropolitan Housing Authority to benefit tenants in Sierra.

"The defendants have inflicted great and lasting harm on a large number of victims and continued the obstructive behavior program even after being charged with their crimes," Herdman wrote in a verdict.

Ronald Wilson also wrote bad checks for more than $ 13,000, prosecutors said. These included: a check for $ 3,150 from a Fifth Third Bank account to a Sierra account at Key Bank with a negative balance of $ 67.91 on the Fifth Third account; a check dated December 11, 2018 from the Sierra account in Key for USD 10,421 payable to the Lorraine Hotel and deposited in another Fifth Third account with a balance of USD 233; and five checks from the second fifth third account for a total of $ 5,835 the following day. Days later, Key Bank returned the two checks Ronald Wilson had deposited to this account, leaving that account in the red at $ 9,024.

The couple then used the phantom funds to negotiate other transactions, resulting in illegal proceeds from checks, prosecutors said, while investor funds destined for property renovations were diverted to the defendants' "personal gain".

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