The U.S. Attorney’s Office says the former CEO of Cornerstone Homes has pleaded guilty in a federal courtroom in Rochester to mail fraud.
David Fleet of Corning owned Cornerstone from 1997 to 2014, buying, renovating and then selling or renting out distressed homes. To raise the money, he sold debentures to private investors, promising them annual returns of eight to ten percent. He then borrowed $25 million from a number of banks, pledging the houses as security.
Federal prosecutors say Fleet then turned his company into a Ponzi scheme, soliciting funds from new investors so he could make payments to the old ones and the banks.
Federal agents finally caught up with him and Fleet now faces sentencing on November 29th.