RICHMOND, VA (WWBT) – A civil suit stemming from a multi-million dollar ponzi scheme in Richmond goes to trial this month. A Richmond family is suing David Silver and his now defunct business for fraud. Silver gave their money to Hanover County businessman and for police officer Donald Lacey. Lacey was convicted in March of running an elaborate real estate scheme.
Barbara Sellman and three family members say they lost more than $750,000 in investments through Silver's company. They claim Silver mislead them. Silver says he too was duped.
Silver said in an interview with NBC 12 news one year ago, "I spend many a sleepless night thinking about what they've [investors] lost and wishing this has never ever happened."
Silver's family ran Old Dominion Financial Services for more than 30 years. He met Donald Lacey 10 years ago and decided to go into business.
"I was duped.... I felt from day one I was dealing with a straight shooter and up until the day he pulled the rug I had no reason to believe otherwise," said Silver.
Money given to Silver and Old Dominion by investors was supposed to be used to flip old homes for profit. Investors received interest payments on their loan until November 2008, during the financial meltdown, Lacey defaulted on everything. 170 investors in Richmond and across the east coast lost a total of $17 million.
Investors discovered that most of the homes were rarely touched. In at least one case no home even existed, but thousands of dollars were tied to the rundown properties. Federal Prosecutors say Lacey was taking money from one set of investors to pay another.
The lawsuit filed by Barbara Sellman and her family accuse silver of "fraud", "conspiracy", and "misconduct." They fault Silver, his wife and son for not ensuring their investments "were safe", for not getting property "appraisals", or for not making sure the work was actually done.
Jeffrey Geiger is Silver's attorney. He said, "It wasn't part of his [Silver's] responsibilities."
Geiger says the Silver's have lost nearly $900,000 and are about to lose their house. He says Silver has cooperated with federal officials in the Lacey investigation and had no knowledge of Lacey's activities.
"If he [Silver] had known anything was going awry, he wouldn't have had his family members invest, he wouldn't have invested and he wouldn't have got the people he's been working with for 30 years to invest," said Geiger.
The Sellmens are seeking $2-million in damages and restitution. The two sides will meet this month to try to avoid a trial, which is set for June 29.