A Sacramento-area real estate broker has been convicted of 49 felony counts of grand theft for operating a “rent-to-own” program that prosecutors described as a Ponzi scheme.
Ronald Russell, 73, also was found guilty on two misdemeanor counts of petty theft, according to a Sacramento County District Attorney’s Office news release.
Russell, owner of Summer Hills Realty, was arrested in September 2012 and accused of bilking multiple victims through real estate fraud. From 2009 through 2010, Russell solicited victims to participate in his “Rent-to-Own” real estate program.
The victims usually were financially distressed and paid Russell about $2,900 each to join this program, authorities said. In return, prosecutors said, Russell promised to purchase homes for victims with investor money, rent the homes to the victims and eventually sell the homes to the victims at his costs to purchase. He reportedly told the victims that he would provide a full refund if they were not satisfied with the transactions.
An investigation by the District Attorney’s Office determined that the victims’ money was used to fund Russell’s personal expenses and pay refunds to those participants who previously had demanded early refunds. No one got a house through the program, and most participants did not get the promised refunds, authorities said. Total losses to the 51 victims amounted to $139,200.
Russell is to be sentenced April 25 in Sacramento Superior Court.
Call The Bee’s Cathy Locke, (916) 321-5287.