Former real estate auctioneer-turned-developer Daniel J. Flynn pled guilty today to nine counts of fraud for an eight-year scheme that prosecutors estimate could range as high as $25 million.
“Instead of admitting I was struggling and under water, I made some bad decisions,” Flynn told U.S. District Court Judge Rya Zobel.
Assistant U.S. Attorney Neil Gallagher said he will recommend a 70-month sentence for Flynn, who was the founder and CEO of a Quincy-based real estate auction company, Daniel J. Flynn & Co.
But he raised doubts whether any of Flynn’s victims will be repaid.
“We just haven’t identified any assets,” Gallagher said.
Sentencing was set for May 9. Federal sentencing guidelines call for a prison term of 78 to 97 months, but Zobel can deviate from the sentencing guidelines at her discretion. The estimated losses range from $9.5 million to $25 million, Gallagher said.
Flynn, 53, solicited investments from 2007 through 2015 for a real estate fund that he said would acquire distressed properties, and took short-term loans from individual investors.
Instead, prosecutors said, he used the money to repay previous investors and for personal expenses, including renovations to his Milton home. The indictment cited fraudulent transactions connected to Flynn’s ownership of a former Quincy nursing home at 86 Greenleaf St. that was converted into a condominium complex.
Flynn told some of the investors that he would use their money to acquire the Greenleaf Street property, but he had already bought it in 2005, Gallagher said.
Questioned by Zobel during a hearing in U.S. District Court in Boston, Flynn admitted to misusing clients’ funds.
“We were going to finish the development of the property and sell it. It wasn’t that I didn’t have any intention. … The market was really bad at the time,” he said.
Flynn was indicted in September 2015 on seven counts of wire fraud and two counts of mail fraud after federal prosecutors said he misused nine alleged victims’ funds. Prosecutors in August revealed in a court filing that the number of potential victims in the case had grown to approximately 150 people and 25 financial accounts.
Gallagher requested two hours for victims’ statements at the sentencing hearing.
Banker & Tradesman first reported Flynn’s legal troubles in 2013 after he defaulted on a series of civil lawsuits connected to his real estate investing activities.
Plaintiffs in those suits included Lee Michael Kennedy, CEO of Quincy-based construction managers Lee Kennedy Co. Inc., and managers of two hedge funds.
