A Cleveland real estate developer was sentenced to 18 months in prison for embezzling funds intended for a community development project.
According to court documents and trial testimony, Arthur Fayne owned and managed Business Development Concepts LLC (BDC), through which he oversaw construction projects. Northeast Ohio Neighborhood Health Services Inc. (NEON), a nonprofit corporation, initiated a project to redevelop a vacant building in Cleveland’s Glenville neighborhood into a grocery store and community center called the New East Side Market. NEON entrusted Fayne with control of the project and payments to vendors.
However, Fayne embezzled approximately $759,105.92 in funds intended to pay the project’s general contractor, the Albert M. Higley Company (AM Higley). Fayne concealed the invoices he received from AM Higley while submitting his own invoices to NEON seeking funds he claimed were for paying AM Higley. He then diverted to his personal benefit more than $750,000 of the funds intended for AM Higley.
Fayne was also convicted of embezzling approximately $125,923.86 in funds intended for audio-visual contractor Crescent Digital. The vendor returned roughly half of the money it had been paid at the start of the project, telling Fayne that it could only collect a deposit at that time, and would invoice BDC for the balance when the work was complete. Fayne diverted the funds into his wife’s personal account and later used money for his benefit.
An investigation found Fayne spent the pilfered funds on excessive gambling – he lost over $1 million at casinos during the project – and on luxury travel and shopping. Last October, a jury convicted him of nine counts of wire fraud.
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