A prominent El Paso businessman and one of his business associates have been indicted by a federal grand jury on fraud charges.
Russell “Russ” Vandenburg, 74, of El Paso, and Scott Stuart, 55, of Las Vegas, were indicted Wednesday in El Paso in an alleged fraud scheme involving real estate companies at which they were in management roles, officials with the U.S. Attorney’s Office for the Western District of Texas and the El Paso FBI office announced in a statement.
No companies were named in the indictment, but Vandenburg was chief executive officer of TVO North America, a national real estate management and property-services company, and a sister company, TVO Management Services, that were based in El Paso.
Stuart is former vice president and controller at TVO North America, according to an old LinkedIn profile.
Vandenburg was CEO for 34 years, including the time of the alleged fraud from February 2015 through October 2017, an El Paso Times archived story shows. He stepped down as CEO in October 2017 for health reasons.
He also was active for years as a University of Texas at El Paso athletics financial donor and supporter. He was chairman of a major UTEP fundraising campaign that ended in 2014.
Vandenberg and his brother, Wayne Vandenburg, in 1983 started TVO Groupe, the Chicago-based parent company of TVO North America and affiliated companies involved in real estate investment and property services.
Phone numbers for TVO North America, which in 2017 had 200 employees at its Downtown El Paso offices, and TVO Groupe in Chicago are not working.
El Paso Times attempts to reach Vandenberg and Stuart were not immediately successful. No lawyers for the men were listed on the initial federal court docket for the indictment.
A date for the men's initial court appearances had not been set as of Thursday afternoon.
The indictment accuses Vandenburg and Stuart of engaging for over two years in a scheme to defraud ownership partners in various properties, including apartment complexes and hotels, in El Paso and other areas of the country.
This allegedly was done by “misrepresenting how funds obtained from the properties and for the benefit of the properties were going to be used and had been used,” the indictment states. The two men had control over the bank accounts involved, the indictment states.
They also allegedly "made false and misleading statements to the partners," and caused others to do the same, to conceal the fraud, the indictment states.
The men had money from individual property bank accounts improperly transferred to the companies’ bank accounts to cover shortfalls in the companies’ operations, to cover shortfalls for other properties, and pay personal expenses for Vandenburg, the indictment states.
Vandenburg allegedly received $160,000 in his personal bank account through six different, improper transfers from one of the companies’ bank accounts, according to the indictment.
Vandenburg and Stuart “are alleged to have violated the trust of individuals who invested in our local community,” Jeffrey Downey, special agent in charge of the FBI El Paso Field Office, said in a statement. “The FBI looks forward to assisting the United States Attorney’s Office in the prosecution of this case."
The two men are each charged with one count of conspiracy to commit wire fraud and 10 counts of wire fraud. That means the alleged fraud involved wire communications in interstate and foreign commerce, the indictment shows.
If convicted, each man faces up to 20 years in prison on each of the fraud counts, according to the U.S. Attorney’s Office.
In 2017, Russell Vandenburg, his brother, and TVO were hit with a fraud lawsuit by an El Paso real estate investor.
And in early 2018, it came to light that TVO real estate companies owed the city and county $1.5 million in delinquent hotel taxes and penalties for three El Paso hotels.
This article originally appeared on El Paso Times: El Paso businessman Russell Vandenburg indicted on fraud charges