RICHMOND, VA (WWBT) – Donald Lacey admitted to mail fraud and an unlawful monetary transactions related to a yearlong federal investigation.
Lacey is a former police officer who many people in Richmond trusted with their money. Today he was on the other side of courtroom, pleading guilty to two felonies.
Donald Lacey gathered hundreds of investors from around the country and promised big returns. You give him your money. He invests it in third party builders. Then buys, fixes and re-sells old homes in the city.
"Sometimes you'd almost have to laugh or then you'd cry," said Investor Marc Denning.
Marc Denning's family thought it was investing a quarter of a million dollars into a home in Church Hill, except, there was no house.
"Unless there's oil underneath this lot I don't see it being worth a quarter of a million dollars. So, we'd like to know where the money is for this property," said Denning.
Denning is just one of dozens of investors we've talked to around the country who have money tied up in homes in Richmond that have never been renovated. And they claim their money is gone.
Last year Donald Lacey defaulted on every loan; 170 investors, 17 million dollars.
The U.S. government says Lacey invested the money into funds like Tower, Premier...all companies he controlled. The government says Lacey rarely used the money for the actual real estate investments.
Lacey admitted to mail fraud and taking $55,000 of investor's money to pay his American Express account.
"Had a plea agreement, plead guilty and that's where we are right now," said Jeffery Everhart, Lacey's Attorney.
Under Lacey's plea deal, prosecutors won't charge him with anything else involving these transactions, but there's no agreement on a sentence. That will be up to a federal judge.
Lacey is out on bond. He'll be sentenced in June and faces up to 30 years in prison.
The judge was concerned about bond and how much money this case involves, and whether Lacey could flee. But prosecutors say most of the money is tied to assets, and they need Lacey available to work with investigators to account for the hundreds of Richmond properties. It's too soon to tell whether investors will get any of their money back.
See below for press release.