JACKSONVILLE, Fla. – A 68-year-old St. Augustine man who ran a crowdfunding investment platform for real estate development projects faces up to 20 years in federal prison after pleading guilty to mail fraud, the Department of Justice announced.
Prosecutors said Daniel Summers owned a Jacksonville-based company called Realty E Vest, also known as IHT Realty Group, which sought to develop and license a crowdfunding platform to people seeking to manage their own crowdfunding efforts. According to court records, investors wire funds to Realty E Vest, where the funds were supposed to be held in escrow until the project met its crowdfunding goal. If a project failed to meet its goal, Summers promised to return the investors’ funds.
When several Realty E Vest crowdfunding projects failed to fully fund, prosecutors said Summers intentionally kept the investors’ money and misappropriated it to fund the ongoing operations of his companies, including paying employee salaries. The feds said Summers repaid the investments of some victims who had complained after learning the crowdfunding projects had actually failed to fund but the money funding these payments was not derived from the real estate developers or any legitimate investment activity.
Summers faces a maximum penalty of 20 years in federal prison. A sentencing date has not yet been set.
Prosecutors also seeking forfeiture in the amount of $744,910, the proceeds Summers obtained as a result of the fraud. The amount of restitution given to victims will be determined at a later date.