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February 10, 2013

Man gets three years in prison for real estate scheme

Russell Daniel defrauded investors of more than $1 million

LOUISVILLE — A Louisville real estate entrepreneur with ties to Jeffersonville was sentenced on Friday to 37 months in federal prison and ordered to pay almost $3 million in restitution for his involvement in real estate schemes throughout Kentucky and in parts of Indiana.

According to a release from U.S. District Court Western Kentucky Division, the sentence on Friday came after Russell N. Daniel, 63, pleaded guilty in September to devising a real estate scheme that resulted in losses of more than $1 million to his investors. 

Daniel admitted in court he solicited more than $700,000 from investors in order to purchase homes in Jeffersonville as well as Prospect, Shelbyville, Goshen and Lexington, Ky. The addresses for those properties, however, were fictitious. Daniel admitted using the money instead to fund unrelated matters, including using the investment money to make payments on promised returns of unrelated investments. 

According to information from the office of David J. Hale, U.S. Attorney for the Western District of Kentucky, between March 1, 2005 and Oct. 31, 2008, Daniel convinced people to invest in his real estate business by promising returns on their investments ranging from 10 to 15 percent. Daniel also told clients that their investment money was going to be used to purchase and rehabilitate houses that would later be sold for profit. 

In addition, between Dec. 28, 2066 and Aug. 14, 2008, Daniel presented his investors with fictitious mortgages totaling more than $530,000 and then between March 23, 2005 and May 27, 2009, solicited another $35,000 for investment in a non-valid mortgage. 

Hale said Daniels’ sentence was “a well-deserved punishment.” 

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