Charles A. Ruhl Jr., a real estate agent and developer in the Quad-Cities, has pleaded guilty to wire fraud and money laundering.
Ruhl won't serve a prison term anywhere near the maximum for the federal wire fraud charge, which is 30 years, or even the five-year maximum he would face for money laundering, according to attorneys on both sides.
The federal government and the attorney representing the 59-year-old president of Ruhl & Ruhl Commercial agreed to recommend a prison sentence of between one day and two years.
The government claims Ruhl illegally withdrew $1.3 million from several limited liability companies that he managed from the end of 2008 through early 2012, and he used the funds for expenses for Ruhl & Ruhl Commercial as well as personal expenses.
Ruhl couldn't be reached for comment.
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Ruhl & Ruhl Commercial is a separate entity from Ruhl & Ruhl Realtors, the Davenport-based residential company.
A person who answered the phone at Ruhl & Ruhl Commercial's Davenport office on Wednesday said all questions regarding the court case are being handled by Ruhl's attorney, Leon Spies, whose offices are in Iowa City.
The guilty plea was "the best avenue to resolve an investigation that has hung over him, his staff and colleagues, and his family for several months," Spies said.
"With the encouragement and support of the many people who know him well, he hopes to regain the trust of those who have believed in him and see his company continue to deliver the high level of service the community has come to expect."
Ruhl has repaid the money, Spies added.
Federal authorities searched the offices at Ruhl & Ruhl Commercial in May. The search was part of the criminal case against Ruhl, Spies said.
Ruhl was charged Tuesday and pleaded guilty the same day.
"Ruhl concealed the fraud by directing his chief financial officers to omit his withdrawals from financial statements provided to investors or to enter false deposits on the statements to offset his withdrawals," Assistant U.S. Attorney Kevin VanderSchel said in a news release Wednesday.
The limited liability companies involved were Lincoln Healthcare Building LLC, Caxton on Bass St. LLC, Biaggi's West Des Moines LLC and Crow Valley Park Venture LLC, the government said.
The release further stated:
- The doctored statements showed large cash balances when in actuality the balances were depleted because of Ruhl's withdrawals.
- Ruhl directed Ruhl & Ruhl Commercial property managers to distribute the doctored financial statements to investors of the involved LLCs.
- Ruhl and his staff created notes payable to document the withdrawals. Some of these notes were not created or signed until well after Ruhl had withdrawn the funds documented in the notes.
- None of the notes payable had been disclosed to the other members of the LLCs at the time they were created.
- On Jan. 15 and 17, 2011, Ruhl directed an employee of Ruhl & Ruhl Commercial to email financial statements to investors of the Lincoln Healthcare LLC. Ruhl knew that the emails contained false financial statements for the Lincoln tax escrow account. The financial statements had been altered at Ruhl's direction to conceal his withdrawals of $75,000 from the account over the period reflected in the statements. The statements also misrepresented and inflated the ending balance in the tax escrow account to conceal Ruhl's withdrawals.
- Ruhl directed the transmittal of the altered statements via interstate wire facilities to further his scheme.
- On Aug. 3, 2010, Ruhl directed Ruhl & Ruhl Commercial employees to issue a check drawn on the Lincoln Healthcare tax escrow account at Wells Fargo Bank, made out to Ruhl personally for $47,000. Ruhl deposited the check into his personal account at U.S. Bank.
- Ruhl's personal account balance was about $350 as of Aug. 3, 2010. Ruhl deposited the $47,000 check to pay property taxes on a personal vacation home in Gogebic County on Michigan's Upper Peninsula.
VanderSchel said other employees of Ruhl's company are not under investigation.
Ruhl is being allowed to stay out of jail until his sentencing date, which hasn't been set, according to the plea agreement. He hasn't yet served a day in jail in connection with this case.