A Granite Bay man is in Sacramento County jail following indictment by a federal grand jury in connection with a property investment scheme.
The 16-count indictment charges John Stuart Hill, 32, with wire and mail fraud. He was indicted April 28, and the indictment was unsealed Monday at his arraignment by U.S. Magistrate Judge Edmund F. Brennan, according to a U.S. attorney’s office news release. Hill entered a not-guilty plea.
According to court documents, between Aug. 9, 2011, and April 2013, Hill, acting under the business name Granite Bay Investment Partners, solicited and received money from investors who intended their money to be used to purchase, rehabilitate and resell residential property in the Sacramento area. Instead, the indictment alleges, Hill used the money for his own personal expenses, made false accounting entries on statements he sent to investors and misrepresented the purchase and resale prices of the properties in question.
In some cases, the properties that Hill alleged his investors were rehabilitating had never been purchased by Hill or his business. In other cases, multiple investors were told that they were partners on the same property to increase the amount invested to far more than the purchase and rehabilitation costs, authorities said.
According to court documents, Hill received at least $1.9 million from investors, only $600,000 of which was ever returned, leaving at least $1.3 million unaccounted for.
Hill was ordered detained pending trial. His next court appearance is scheduled for Aug. 18 before U.S. District Judge Morrison C. England Jr.
The case resulted from an investigation by the U.S. Secret Service.