Tyler

Jules Bernard Fleder, who was sentenced to 10 years in federal prison a year ago and ordered to pay more than $27 million to victims who invested in his fraudulent real estate scheme, has died.

Fleder, 68, was convicted along with Jack Arnold Brown, 68, and Roger Sherman, 73, for their roles in the scam, which involved Lindale property.

On Nov. 13, 2006, Fleder was sentenced to 10 years in prison but he had served less than a year when he succumbed to cancer.

On Friday, Federal Bureau of Prisons spokeswoman Felicia Ponce confirmed that Fleder died Oct. 22 in a prison in Butner, N.C., but she said she did not know the cause of death.

Becky Smith, victim services director for the U.S. Attorney’s Office, said Fleder had an unknown form of cancer and had been housed at a federal hospital facility that specializes in cancer treatment.

Several of Fleder’s victims, many elderly, have died since losing their life savings and retirement funds to Fleder’s scheme.

Assistant U.S. Attorney Arnold Spencer said the restitution Fleder was ordered to pay to the victims would still be collected against his estate “at the extent it can be.” He said that because Fleder’s conviction was final and there was no pending appeal, the restitution order was still valid.

Fleder, a businessman who operated 130 entities nationwide, pleaded guilty to conspiracy to commit securities and mail fraud and committing securities fraud for bilking the investors from January 2001 to November 2004.

Brown, who was licensed to sell life and health insurance and was a securities broker, was sentenced to five years in prison after he pleaded guilty to the conspiracy charge. He is located in an Oakdale, La., facility and has a projected release date of March 21, 2011, according to prison records.

Sherman, a former lawyer who lived in Nevada and Minnesota, was sentenced to 3½ years in prison after he pleaded guilty to the conspiracy charge. He is housed in a Duluth, Minn., prison and is expected to be released Jan. 30, 2010. His attorney earlier reported that he had prostate cancer.

Fleder and Sherman were ordered to pay $27.5 million in restitution to the victims, while Brown was ordered to pay $8.2 million.

Dozens of East Texans were victimized by the men, as well as people from California, Pennsylvania, Wisconsin, West Virginia, Oregon, Tennessee, Indiana, Michigan and Illinois.

The late Assistant U.S. Attorney Wes Rivers, who prosecuted the case with Spencer, said earlier that more than 250 victims were involved in the “Ponzi-type” case. Based in Los Angeles, Fleder concocted real estate joint venture agreements and mailed misrepresentations. He claimed he intended to establish a modular home manufacturing plant and a residential subdivision in Lindale. But after obtaining nearly $2 million from investors, he used the funds to buy luxury automobiles, expensive boats and a house in Beverly Hills. He also participated in other real estate schemes in East Texas and throughout the country.

Fleder fled to Bali, Indonesia, during the investigation but he was found by authorities and brought back to Tyler to face the charges.

VICTIM DEATHS

Prosecutors have said George Freeman, 61, and his wife, Jo Freeman, 73, died in 2004 in an apparent murder-suicide in Smith County and were victims in the Lindale scheme, which family members believe led to their deaths.

After losing money in a fraudulent real estate investment, Edward Cook, of Flint, committed suicide. A month later, his father, Carl Cook, who had also lost money in the scam, died of a broken heart, said Carlen Walker, Carl’s daughter.

James Calvert said his wife suffered a heart attack because of the defendants.

Jonna Fitzgerald said Brown stole several hundred thousand dollars of her father’s retirement and that on his death bed he asked why he had trusted Brown.

Herbert Tennant said his wife Sue died after they invested $350,000 with Brown and Fleder.

Bettie Johns testified on behalf of her mother, who died after she invested with Brown. She said her mother planned to leave family farmland to her grandchildren, but was forced to sell it.

After hearing all of the victim impact statements on Nov. 13, 2006, Fleder said it was difficult to sit through all of the victims’ statements and hear all of the terrible things that he had no prior knowledge of. He said he had no bad intentions and he would spend the rest of his life trying to pay restitution.