Mark Lee Cleaton of Rockwall was found guilty of investment fraud in October 2015. He has been sentenced to 80 months in a federal prison.
U.S. District Judge Jane J. Boyle on Thursday, ordered Cleaton to pay $343,353.00 in restitution on top of the prison sentence as a result of his conviction on four counts of investment fraud, according to U.S. Attorney John Parker of the Northern District of Texas.
Judge Boyle has ordered Cleaton to surrender to the Bureau of Prisons on April 6, 2016.
According to court documents, Cleaton was the managing member of North American Capital LLC, formerly located at 2001 Bryan St., Suite 2125, in Dallas. He also created a limited partnership, North American Capital Investment Fund LP in August 2009.
From August 2009 to July 2010, Cleaton solicited $350,000 in investments in NACIF from several people, promising to invest that money in short-term, high-yield real estate projects.
Instead, he used the money for himself, spending none of it as promised. Cleaton, throughout the scheme, provided false investment memoranda and marketing materials to potential investors, according to court documents.
Some of that material falsely represented an audited “seven-year performance” history of NACIF, when as Cleaton well knew, NACIF had not even existed for seven years or had any rate of return, according to court documents.
Cleaton instructed each investor to wire funds into a checking account of which he had sole signatory authority.
By the time he received the first investor’s funds, he had been locked out of his office in Bryan Tower for non-payment of two months’ rent.
Cleaton immediately spent the investors’ money within weeks on personal expenses and unrelated business ventures, including credit card bills, trips to Hawaii, cash withdrawals, a used car business, and a high-end car audio/stereo store, according to court documents.
He also intentionally failed to disclose to subsequent investors that he had already raised and spent prior investors’ money.
Cleaton additionally made lulling payments to one victim investor from a later investor’s funds, according to court documents.
The FBI conducted the investigation and Assistant U.S. Attorney Nick Bunch and Deputy Criminal Chief Assistant U.S. Attorney Katherine Miller prosecuted Cleaton.