A Spokane ethanol project promising rich financial returns to dozens of local investors turned out to be a fraud.
The man behind the scheme, 55-year-old businessman Robert J. Braun, pleaded guilty this week to five counts of wire and securities fraud and will spend three years in federal prison and repay almost $1.5 million to investors, according to federal court records.
Braun told investors their money would be used to build an ethanol plant under the business names Novahol Spokane, LLC and S&B Energy Spokane, LLC. He promised quick and extraordinary returns – in some cases 700 percent – according to documents filed by U.S. Attorney Michael Ormsby. Instead the approximately 60 investors have recouped about 1 percent of their investment.
Braun used their money to help make payments on three homes, pay for clothing and department store wares, and prop up a money-losing women’s shoe and accessory store he owned in downtown Spokane called Boutique 238.
Braun owned a mortgage broker business that closed nine years ago and rather than adjust his lifestyle to match his diminished income, he launched the ethanol fraud, according to court records.
“Investors should be wary of any investment opportunity that seems too good to be true, even if someone they know and trust introduces them to the opportunity,” Ormsby said in a news release. “Perpetrators of fraud are aware of the fears of investors and can tailor their schemes to convince even the most cautious investors to part with their money.”
Subscribe to the Morning Review newsletter
Get the day’s top headlines delivered to your inbox every morning by subscribing to our newsletter.