DAVENPORT, Iowa (AP) - A judge sentenced a prominent Iowa real estate developer to one year in prison Friday for embezzling money from successful business ventures to prop up struggling investments and keep up a wealthy lifestyle.
U.S. District Judge Stephanie Rose said that she struggled to find an appropriate sentence for Charles Ruhl Jr. of Davenport, especially since he had paid his victims back and made many positive contributions to the community.
But she said she was troubled that he secretly withdrew money for years from real estate partnerships he managed, even after he had been caught doing so once before. She said Ruhl, the former owner of Ruhl and Ruhl Commercial, caused great stress to employees who were “roped into” the fraud scheme when he ordered them to create false financial statements to cover it up.
The sentence of 12 months and one day was less than the two years that prosecutors sought but more than Ruhl’s attorney suggested. Rose said she would recommend, but could not guarantee, that he serve the time at a minimum-security prison in Yankton, S.D.
Ruhl, 59, will be ordered to self-report to prison once an institution is designated in coming weeks.
Ruhl pleaded guilty in September to wire fraud and money laundering. He admitted that he improperly withdrew $1.3 million from real estate partnerships he managed, which owned commercial buildings in West Des Moines, Bettendorf and Moline, Ill.
Some of the money was transferred to make payments in other property investments that were struggling and make payroll for his company. But Ruhl also made withdrawals to pay a $47,000 property tax bill on his huge vacation home in Michigan’s Upper Peninsula, $34,000 in tuition for his daughter to attend the University of Richmond, and $26,000 in repairs to an airplane owned by one of his businesses, federal agents testified Friday.
Assistant U.S. Attorney John Keller said Ruhl committed a “financial, greed-driven offense.”
“This millionaire takes money that is not his to pay for whatever he needs,” he said, noting that Ruhl had assets of $23 million during the fraud scheme.
The sentence completes a surprise professional downfall for Ruhl, who’s part of the fourth generation of a family that has been synonymous with business, insurance and real estate in Davenport since the 1860s. His attorney, Leon Spies, noted that Ruhl will no longer be able to practice real estate in Iowa and Illinois, borrow money or hold a position of public trust.
“He has lost his good name,” Spies said, calling his client “a financially broken man.”
Ruhl’s withdrawals started in February 2008 and were uncovered in 2012, when the investors in a Bettendorf health care building learned that it was delinquent on its property taxes and asked Ruhl to explain. After months of delay, Ruhl admitted during a meeting of the partnership’s board in May 2012 that he had secretly taken more than $500,000 from its accounts.
Over the next year, he admitted to similar improper withdrawals from three other partnerships. He eventually paid all of the investors back, with interest, and covered the legal and accounting fees they spent looking into his fraud. Several investors signed a letter to the court saying they did not consider themselves victims.