Developer pleads guilty to transferring federal funds into personal account

Posted July 14, 2011, at 9:40 a.m.

PORTLAND, Maine — Former Twin Cities developer Travis Soule pleaded guilty Wednesday to federal charges of fraud and embezzlement in connection with a scheme to transfer federal housing funds to his personal bank accounts.

Soule, 47, of Rockland appeared in U.S. District Court on Wednesday. He will be sentenced following a court-ordered pre-sentencing report. He faces up to 15 years in federal prison and up to $500,000 in fines. He also could be sentenced to as many as three years of supervised release on each charge.

Wearing a blue sport shirt and tan slacks, Soule stood before U.S. District Court Judge D. Brock Hornby and waived his right to indictment by a grand jury and his right to a trial by jury.

Asked by the judge whether he committed the two crimes, Soule answered: “Yes, your honor.”

He cannot appeal his conviction. A sentencing date is scheduled for November. If he is sentenced to more than 18 months in prison, he can appeal his sentence, the judge said.

The plea dates back to June 8, when he and federal prosecutors entered into an agreement.

In 2009, the U.S. Department of Housing and Urban Development Office of Inspector General began investigating Soule’s housing and development activities after learning of irregularities in his loan applications for HUD funding to rehabilitate and repair his low-income rental properties.

In June, he was charged with federal counts of fraud and theft, stemming from $180,000 worth of fraudulent transactions between June 2007 and May 2008 for rehab projects at three Pine Street properties.

Soule pleaded guilty to soliciting estimates from various contractors for rehabilitation of those properties and filing the estimates with fraudulent applications to the city of Lewiston for loans under HUD’s HOME program, which is aimed at improving availability of affordable housing for low-income families.

Through his plea, Soule acknowledged that he embezzled money from the HOME Investment Partnership Program by converting checks and vouchers for his own use, including forging subcontractors’ signatures and depositing some of the checks into his personal checking account.

In addition to the federal convictions, Soule has faced a number of court actions in the past two years.

In December, an Androscoggin County Superior Court judge ordered Soule to pay a former contractor more than $66,000 for work the man did on Soule’s Stevens Mills condominium development in Auburn.

In 2009, the U.S. Environmental Protection Agency filed complaints against Soule, alleging 51 violations of the federal lead disclosure law. If convicted, he could face more than $500,000 in fines.

Soule is also facing legal action in Cumberland County, including a civil claim by a former partner that Soule mismanaged the pair’s rental properties and diverted thousands of dollars to himself and his wife.

There have also been a number of foreclosure actions on his properties in Auburn and Lewiston. Soule owned roughly 600 rental units in the Twin Cities area at one time.

Attorney Henry Griffin, who represented Soule in court on Wednesday, said after the hearing that his client hopes to present to the judge at the time of his hearing the context of his actions that resulted in the crimes he has admitted.

Soule doesn’t dispute most of the facts presented by prosecutors, Griffin said. Soule lost his rental properties in 2007 when the cost of oil roughly doubled and he struggled to keep the apartments heated.

“What we’re disagreeing with is some context for Travis’ motive for doing” what he did that was illegal, Griffin said.

“He’s not a nefarious individual who spent this on houses and cars and other things,” Griffin said. “He’s a guy who took the money, put it into accounts he shouldn’t have to pay his bills.”

To read more of the Sun Journal, visit sunjournal.com.

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