Plea Bargain Expected in Investment Fraud Case
North County businessman Robert Neral, who vanished earlier this year, leaving dozens of investors and creditors in the dark, on Friday pleaded not guilty to federal charges of mail and wire fraud.
As part of a plea bargain, however, the 43-year-old Fallbrook resident is expected to plead guilty to the two charges on Sept. 2, according to Assistant U.S. Atty. Charles F. Gorder Jr. and Robert Grimes, Neral’s attorney.
Neral faces a maximum 10 years in prison and $500,000 in fines.
According to an information complaint filed by Gorder, Neral used more than a dozen firms and limited partnerships to defraud investors, and, at times, sold the same piece of property to several different clients.
Actual losses to 17 investors--including some of Neral’s relatives--totaled $426,000 to $459,000, according to the complaint. Neral’s investors claim his firms may have pulled in as much as $2 million in the last four years, although Grimes said Friday that that estimate was exaggerated.
Neral turned himself in to federal authorities Friday morning. He was released on $50,000 cash bail, which will be used to reimburse investors, Grime told U.S. Magistrate Joseph Schmitt, who is on temporary assignment in San Diego from El Centro.
Neral, according to the complaint, “misappropriated” client funds for his personal use and used new investors’ money to pay existing clients--a typical Ponzi-type scheme.
Neral disappeared in February, abandoning his wife and three children and leaving investors uncertain about the status of their money. The FBI and U.S. attorney’s office opened an investigation into Neral earlier this year, and several investors later filed civil lawsuits against him.
Neral returned to San Diego with little fanfare in late April and opened negotiations with federal prosecutors and his former investors.
A settlement of the civil lawsuits is expected soon, according to attorney Robert Jackson, who filed legal action on behalf of several Neral investors.
Neral operated out of a 6,900-square-foot Encinitas office building that housed his Execusuites limited partnership, which rented headquarters-type office space to 20 tenants.
In February, Neral was given state Public Utilities Commission approval to operate a cellular telephone network in North County.
Neral was trained as a computer expert in the Army, and later worked for the Carnation Co., helping start the company’s computerized operations in the late 1960s.
He began investing in real estate about 15 years ago, specializing in land and office management.
He also opened a small antique business in Carlsbad, according to acquaintances.
Neral stood silently by Grimes after Friday’s court hearing, refusing to discuss his case. Grimes would not say why Neral had vanished earlier this year, but emphasized that Neral returned this spring “voluntarily.”
