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Federal grand jury indicts Cleveland real estate developer on wire fraud charges

Arthur Fayne allegedly orchestrated two schemes to defraud businesses and embezzle funds for personal use resulting in the loss of over $1 million.
U.S. Department of Justice

CLEVELAND — U.S. Attorney Justin Herdman announced Friday that Arthur Fayne, age 58, of Aurora, has been indicted and charged with wire fraud.

The nine-count federal indictment accuses Fayne of orchestrating and executing two schemes, defrauding separate businesses and embezzling funds for personal use, including gambling at a casino, resulting in the loss of over $1 million.

According to the indictment, Fayne, who served as vice president and a board member on a for-profit subsidiary of a non-profit corporation, contracted a company to serve as the construction manager and general contractor on a redevelopment project in the city of Cleveland in June of 2016 on behalf the non-profit.

The terms of the contract authorized a separate business, Business Development Concepts, which Fayne owned, to receive payment to be disbursed to the general contracting company. 

The indictment claims that from December of 2016 through March of 2018, Fayne caused the non-profit and its for-profit subsidiary to pay $2,629,740.38 to his Business Development Concepts company, but only distributed $1,870,634.46 to the general contracting company. 

Fayne is accused of siphoning the remaining $759,105.92 through his own company to use for personal use, including gambling at a casino. He allegedly executed this scheme by creating and submitting falsified invoices to the non-profit and its subsidiary for money owed to the contracting company.

"Additionally, the indictment states that the defendant devised a second scheme to defraud a subcontractor on the redevelopment project," the announcement from U.S. Attorney Herdman's office states. "On or about June 28, 2018, the defendant caused a subcontractor on the project to make a $125,923.86 wire transfer to a bank account owned by the defendant's wife. These funds were allegedly used for personal use, which included gambling at a casino."

In total, Fayne is accused of losing approximately $1 million on separate occasions. 

Editor's Note: The below video aired on July 29, 2020

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