DALLAS (CN) – The owner of Metro Buys Homes has pleaded guilty to mail fraud: running a Ponzi scheme that cost investors millions of dollars. David Boles, 52, of Colleyville, faces up to 20 years in federal prison.
In his plea agreement, Boles agreed to pay restitution for losses resulting from all of his criminal conduct – not limited to losses stemming from his conviction.
From January 2008 to August 2010, Boles promised investors their money would be used to buy real estate, and that it was secured by real estate, the U.S. Attorney’s Office said. But Boles did not actually own the “security” and he sent out phony deeds of trust and real estate liens that purportedly gave investors liens against specific properties.
“Boles also sent checks to investors, and advised them that the checks represented profits from their investments. However, in many cases the checks were simply drawn from the principal investments made by the investor,” the U.S. Attorney’s Office said in a statement.
“On other occasions, Boles funded checks written to one investor with money received from other investors. Boles believed that telling the investors that the checks represented earnings on their investments would encourage them to invest more money.”
Boles will be sentenced on May 26 by U.S. District Judge Jane J. Boyle.