David Fleet, Mail Fraud, NY 2024

David Fleet, 52, of Corning, NY, is facing consequences for a calculated fraud scheme that spanned years and left investors in the dark. The former owner and CEO of Cornerstone Homes was sentenced to three years probation and 100 hours of community service after being convicted of mail fraud in federal court. U.S. District Judge Elizabeth A. Wolford also ordered Fleet to pay approximately $88,000 in restitution to his victims.

Fleet ran a real estate operation from 1997 to 2014 under various names, ultimately branded as Cornerstone Homes. The company specialized in buying, renovating, and reselling or renting distressed properties. To fund the acquisitions, Fleet sold debentures to private investors, promising annual returns between 8% and 10%. But behind the scenes, the foundation was crumbling.

Cornerstone borrowed roughly $25,000,000 from multiple banks, using homes purchased with investor funds as collateral. By March 2010, Fleet knew the business could not meet its financial obligations. Operating income was insufficient to cover debt payments to both banks and private investors. To make matters worse, Fleet personally lost more than $2,000,000 through high-risk options trading.

Despite knowing Cornerstone was on the brink, Fleet continued soliciting new investments—$88,000 from about 13 individuals—using materially misleading statements. He failed to disclose the company’s dire financial state or that he had taken over $2,000,000 of Cornerstone’s capital for personal use. The deception allowed the operation to limp forward while victims remained unaware.

The case was handled by Assistant U.S. Attorney John J. Field and investigated by the U.S. Postal Inspection Service, the Federal Bureau of Investigation, and IRS Criminal Investigation. Inspectors acted under the direction of Shelly Binkowski (USPIS), Adam S. Cohen (FBI), and Kathy A. Enstrom (IRS-CI), New York Field Office.

Fleet’s conviction is a stark reminder that even in seemingly legitimate businesses, fraud can fester under promises of steady returns. Now, instead of running real estate deals, he’ll be logging community service hours and repaying the trust he exploited—one dollar at a time.

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