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Louisville man sentenced for real estate embezzlement, fraud

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Ordered to pay $520,174 in restitution to property owners

 LOUISVILLE – A Louisville man was sentenced to twenty-one months in prison and ordered to pay restitution of $520,174 by Chief Judge Joseph H. McKinley, in United States District Court, for posing as a real estate investor and embezzling funds from fraudulent agreements, today announced United States Attorney John. E. Kuhn, Jr.

Eric Claxton, was charged with three counts of wire fraud, in a superseding information, on July 28, 2016 and entered a guilty plea to all charges on October 31, 2016. Claxton remains free on a secured bond.

Claxton admitted to defrauding the owners of Rangeland Manor, San Souchi and Capri Arms apartment complexes located in Louisville, Kentucky, between March 2012 and November 2012. According to the plea agreement, Claxton represented to the owners that he was going to purchase the complexes and entered into a purchase agreement. The agreement allowed Claxton to manage and operate the complexes pending the completion of financing.

In support of the purchase agreements, Claxton submitted false documents to support his ability to purchase the apartments. This included a fraudulent letter from an accounting firm that contained false tax returns and balance sheets. Claxton did not have the means to purchase the properties.

Further, while managing the apartment complexes, which was part of the purchase agreement, Claxton fraudulently depleted the bank accounts.

In 2014, Claxton committed an identical scheme in Kingsport, Tennessee. Claxton misrepresented his finances to the owners of Tuscany Villas, Inc. After entering into an agreement to purchase the apartments, Claxton managed the property and while in control of the property, depleted the bank accounts.

Restitution was due upon sentencing. The amounts included $191,174 to the owners of Tuscany Villas, $300,000 to the owners of Rangeland Manor, and $29,000 to the owners of San Souchi.

This case was prosecuted by Assistant United States Attorney Bryan R. Calhoun and was investigated by the Louisville Metropolitan Police Department and the United States Secret Service.