DALLAS (CN) - The co-founder of the Golden Gate Real Estate Investment Trust, who had been on the lam after being convicted of securities fraud in April, has been arrested. Michael Rouse was arrested in or around Fort Lauderdale.
Rouse, 56, of Wellington, Fla., was convicted by a Dallas federal jury on all nine counts of felony indictment related to his operation of the Golden Gate REIT.
U.S. District Judge Barbara Lynn let him remain free pending sentencing, but ordered him not to leave the area of Denton, Collin and Dallas Counties.
Rouse and his convicted co-conspirator James Testa, 61, of Carrollton, founded and were trustees of Golden Gate REIT. They raised more than $2 million from investors in 2003-04, by claiming the REIT was a safe investment in real estate.
But prosecutors aid none of the money was ever invested in anything connected with real estate. The only investments Rouse and Testa ever made were in foreign currency trading, and those investments failed completely.
"The investors lost most or all of their money, while Testa and Rouse paid themselves handsome salaries and spent the investors' funds on business and personal expenses, including Mercedes Benz automobiles that cost more than $125,000 each," prosecutors said in a statement.
Rouse was convicted of one count of conspiracy to commit securities fraud, mail fraud and money laundering; two counts of securities fraud and aiding and abetting; five counts of mail fraud; and one count of money laundering.
Testa, who testified for the government against Rouse, pleaded guilty to one count of money laundering in 2009 and was sentenced in August this year to 7 years in federal prison and ordered to pay $1.9 million in restitution.
One month after Rouse's conviction, he requested a modification of his conditions of release so he could go to Florida for surgery by a physician who had previously treated him. Judge Lynn granted the request, but probation officers reported in June that Rouse fled after the surgery and was a fugitive.
In July, Judge Lynn sentenced Rouse in absentia to 17½ years in federal prison and ordered him to pay $1.9 million in restitution to the 62 identified victims.
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