RICHMOND, VA—David A. Silver, 59, of
Henrico, Va., former owner of Old Dominion Financial Services, was sentenced
today to 60 months in prison, followed by three years of supervised release,
for false misrepresentations made to investors whose money he had given to
Donald Lacey for real estate development. Lacey was previously convicted of
running a Ponzi scheme with investor money and was sentenced to 121 months of
imprisonment in August, 2010. As part of the sentence, Silver was ordered to
pay $8,641,844.94 in restitution to 89 victims, and will be held jointly and
severally liable with Lacey for this amount.
Neil H. MacBride, United States Attorney
for the Eastern District of Virginia, made the announcement after the defendant
was sentenced by United States District Judge Henry E. Hudson.
According to court documents, Silver was
the owner of ODFS, a private lender for real estate development projects.
Beginning in 2000, Silver started doing business with Donald Lacey and directed
investor funds to Lacey for renovation projects. Silver solicited investors who
made loans for these projects and received deeds of trust against particular
properties that were meant to protect their investments.
Silver made several false statements to
investors to encourage them to invest, including that their money would be
escrowed; that the loan-to-value ratio for each project would not exceed 80%;
that they would receive a “first position” against the properties in which they
were investing; and that ODFS would be lending to a diversified group of
builders. However, by 2006, all of the investor funds received by Silver were
being immediately transferred to Lacey through one of three Lacey-owned limited
liability corporations. Instead of completing renovation projects, Lacey used
the money to pay other investors, and significantly overleveraged the
properties with multiple liens far exceeding the value of the property. For
each construction loan he arranged, Silver received a substantial brokerage fee
at settlement and, in many instances, a cash payment from Lacey.
This investigation was conducted by the
FBI, the U.S. Postal Inspection Service and the Internal Revenue
Service—Criminal Investigation, with significant assistance from the Virginia
Corporation Commission and the National White Collar Crime Center. This case
was prosecuted by Assistant U.S. Attorney Laura Colombell Marshall.
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