Posted by Terry Alexander - email
RICHMOND, VA (WWBT) - Tonight we hear from a local man who is defending himself after many of his investors lost millions of dollars. They claim they were part of a real estate scam run by former Henrico county police officer Donald Lacey.
Since we first told you about a federal investigation into the investment deals of Donald Lacey, dozens of people have come forward accusing Lacey of bilking them out of millions of dollars. David Silver handled much of that money. Lending it to Donald Lacey to invest in homes. Tonight he tells his story.
For 32 years David Silver ran Old Dominion Financial Services. A company that bought and sold home improvement contracts.
10 years ago he met Donald Lacey and decided to venture into the business of rehabilitating properties to sell for a profit.
"Virtually everything Don said was gospel. Over the period of time he never missed a payment. He was never late on a payment," said David Silver, owner of Old Dominion Financial Services.
Investors were raking in money. 10 to 12 percent interest on short term loans. But in November, the bottom dropped out. Don Lacey had defaulted on every loan....170 investors.... 17 million dollars.
"I woke up one morning thinking everything was fine. Found out the next day we were down to pennies in our account," said Silver.
Silver says he paid a quarter of a million dollars in loans and drained all the money out of his business. He says he too was also investing in the properties. And couldn't believe where his money went.
"Houses have not been touched. I personally own an investment on a house where a tree is growing through a wall," said Silver.
Marc Denning has little sympathy for Silver. He lost his life savings in the deal and says Silver had more of a responsibility to his investors.
"He was definitely negligent in seeing what was going on with these properties. He lives here. He was supposed to do spot checks on these houses," said Marc Denning.
Donald Lacey was supposed to lend the money to third party builders. But it was actually going to companies he controlled.
"I believe he got in over his head. Didn't want to say anything and then started robbing Peter to pay Paul," said Silver.
David Silver says he was duped.
"Oh he's good! He's a fun loving guy. There's no reason not to like him. He's slick," said Silver. "When I asked him why did you do this? Why did you do this, this way? You had to know?Why did you do it? And his answer to me was, I guess I was in denial."
"He was taking on as many projects as he could. He was ambitious and ambition has never been a crime. In this country," said Steven Benjamin who is Donald Lacey's attorney.
Lacey's attorney points out speculative real estate is risky he says people are now just looking for someone to blame.
"In every case where the moneys were not paid back he certainly owes the money. He wants and is doing everything that he can to return that money," said Steven Benjamin.
Old Dominion has folded and investors Silver has known for 20 years have lost everything.
"I spend many a sleepless night thinking about what they've lost," said Silver. "It ruins your day. It ruins your day."
David Silver says he is broke and looking for a new job. He says his dream home that Donald Lacey built for him, is on the market. There is a lawsuit pending against Silver in Richmond court. Several other investors have told me they plan to sue as well.