Greenwood horse farm owner pleads guilty to federal fraud charges | #phishing | #scams


A Greenwood horse farm owner who was indicted in 2020 on nearly 20 federal charges has pleaded guilty to two of the charges.

Daniel R. Fruits plead guilty to one count of wire fraud and one count of money laundering in the U.S. District Court for the Southern District of Indiana on July 13. He was charged in December 2020 with 10 counts of wire fraud, six counts of money laundering, two counts of making false statements to a federally insured bank and one count of mail fraud. In exchange for pleading guilty, all 17 of the remaining charges will be dismissed, according to court documents.

His trial was set to begin on August 1.

The maximum penalty for the wire fraud charge is 20 years of imprisonment, a $250,000 fine and three years of supervised release following imprisonment. For the money laundering charge, the maximum penalty is 10 years of imprisonment, a $1 million fine and five years of supervised release.

By pleading guilty, Fruits admitted to knowingly devising a scheme to defraud and attempting to engage in a monetary transaction involving “criminally derived property,” court documents say.

Federal prosecutors say Kloiber Management Services LLC, which is controlled by the Kloiber family of Lexington, Kentucky, hired Fruits in January 2015 to launch and operate Secure Transit.

In 2017, Fruits became a 10% owner of the business. Between January 2015 and June 2019, the Kloiber family made 16 investments totaling $14.3 million in Secure Transit, according to court documents.

Throughout that time, Fruits repeatedly lied about the company’s financial health, who its customers were and what the money invested was being used for. He allegedly sent the investor fake customer sales contracts and falsified financial statements. Fruits would often ask for additional investments — sometimes in the millions of dollars — to buy trucks or other business-related expenses.

Fruits used most of the investor’s money on personal items. He allegedly spent $880,000 to buy the horse farm, Travis Creek Stables, on Stones Crossing Road in Greenwood, and his personal home, where he used the investor’s money for renovations and a pool, court documents said.

He spent $55,000 on a horse, $33,000 on a horse trailer, $560,000 on an RV and trailer, $111,000 on a Corvette, about $120,000 on four Rolex watches, $23,000 on payments for two Ferraris and $30,000 on payments for two escorts. He also bought 10 guns, court documents show.

Additionally, Fruits attempted a mortgage fraud scheme on Fifth Third Bank. In late 2018, Fruits made false statements to Fifth Third Bank to secure a $432,000 mortgage. He submitted falsified paperwork twice to show that loans from another bank had been paid off, when they had not been, according to court documents.

Also in 2018, Fruits attempted a title-washing scheme to remove a bank’s lien from the title of a truck he purchased. He financed the truck with a loan from Ally Financial for more than $69,000, court documents show.

Several months later, he sent the Indiana Bureau of Motor Vehicles a falsified letter pretending to be Ally Financial stating the loan had been paid off, according to court documents.

Fruits was placed on supervised release until his trial began, with conditions. However, last August, Fruits was arrested for violating the conditions of his release.

He remains in federal custody while awaiting his sentencing hearing, which has not yet been set. The hearing will be set after a pre-sentencing report is completed, court documents say.



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