David Silver, 59, Richmond, Virginia, former President of Old Dominion Financial Services (ODFS), pleaded guilty to giving false assurances to investors whose money he had given to Donald Lacey for real estate development. Lacey was previously convicted of conspiracy to commit mail fraud and sentenced to 121 months in prison on Aug. 3, 2010.
Silver was charged on Feb. 23, 2012, and pled guilty to conspiracy to commit mail fraud. Silver faces a maximum penalty of five years in prison when he is sentenced on June 25, 2012.
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.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia, made the announcement after the plea was accepted by United States District Judge Henry R. Hudson.
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.