2-Year Prison Sentence Given to Swindler : North County Man Ordered to Repay Debt to Investors

North County businessman Robert Neral, after an emotional, tearful plea for leniency, on Monday was sentenced to two years in federal prison and five years of probation. He also was ordered to pay nearly $450,000 to those who were swindled in his real estate investment scheme.

Neral, who pleaded guilty to two counts of mail and wire fraud last month, will surrender Nov. 17 at an as-yet-undetermined federal prison.

A pre-sentence report prepared by federal probation officers had recommended a three-year prison term.

In his emotional statement, Neral, 43, told U.S. District Judge Judith Keep that he disappeared in February because he “could no longer handle the deceit that had permeated my life.”

Neral voluntarily returned in April and began discussions with federal prosecutors and his former investors, who had filed legal action.

Last month, Neral admitted that he defrauded his investors for more than two years, paying existing clients with funds solicited from new investors--a typical Ponzi scheme. Neral also admitted that he used some of the money for personal expenses.

Neral’s real estate enterprise encompassed more than a dozen firms and limited partnerships. He operated Execusuites in Encinitas, a headquarters-type office with 20 tenants, and earlier this year he was given state approval for a cellular telephone network in North County.

Seventeen clients, including some of Neral’s relatives, lost about $450,000, according to Assistant U.S. Atty. Charles F. Gorder Jr.

Since he returned in April, Neral has cooperated with federal authorities and investors, according to his attorney, Robert Grimes. Last week, Neral signed an agreement with his clients, promising not to attempt to dismiss their claims when he files bankruptcy, which is expected soon.

Neral has about $70,000 in assets, said Steve Petach, Neral’s bankruptcy lawyer. Fifty thousand dollars of those assets were used to secure Neral’s bail and that amount will later be returned to investors, Petach said.

Although he was ordered to pay back the $450,000 he defrauded from investors, Keep acknowledged that “there’s no way we’re going to get (the money) out of you in five years, unless there’s some wonderful thing that happens to you.” She also suggested that Neral seek psychiatric or psychological counseling.