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Crowdfunding RE Company Owner Sentenced for Mail Fraud

A Jacksonville-based firm connected investors with projects via crowdfunding, but a judge ruled it was fraud. The owner pleaded guilty and will serve 21 months in prison.

JACKSONVILLE – Crowdfunding, like every other type of real estate investment, comes with a risk of fraud if key players are willing to bend or break the rules.

According to a release put out by the United States Attorney’s Office for the Middle District of Florida, U.S. District Judge Timothy J. Corrigan sentenced Daniel Summers (St. Augustine) to 21 months in federal prison for mail fraud. As part of his sentence, the court also ordered Summers to pay $486,874.11 in restitution and, separately, entered a forfeiture money judgment against him in the amount of $739,910, the proceeds of the fraud scheme.

Summers had pleaded guilty on April 29, 2021.

Summers owned a Jacksonville-based company called Realty E Vest, a/k/a IHT Realty Group, which operated an internet crowdfunding investment platform for real estate development projects. Summers also owned E Vest Technology, which sought to develop and license the Realty E Vest crowdfunding technology platform to other people or companies that wanted to manage separate crowdfunding efforts.

Under the program, investors would wire funds to Realty E Vest. In theory, Realty E Vest would hold those funds in escrow until the project met its crowdfunding goal. If a project failed to meet its goal, Summers promised to return the investors’ funds.

However, after several Realty E Vest crowdfunding projects failed to fully fund, Summers intentionally kept the investors’ money and misappropriated it to fund ongoing operations of his companies, including employee salaries. Summers created the illusion that the crowdfunding projects had reached their goal, and the participating were invested in the real estate project.

Summers then sent investors purported “investment returns” via mailed checks or wire transfers.

According to the court documents, Summers also repaid some investments to victims who had complained after discovering that the crowdfunding projects failed to fund. However, the money funding these came from victims’ principal investments in other crowdfunding ventures and equity investments.

This case was investigated by the Federal Bureau of Investigation investigated the case, and Assistant United States Attorney David B. Mesrobian prosecuted.

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