WAUKESHA — A Sheboygan man has been charged after he allegedly approached fellow veterans who served with him in Afghanistan and got them to invest $100,000 in a real estate venture that saw him provide phony statements to the investors.
David Nitze, 53, was charged Wednesday in Waukesha County Circuit Court with a felony count of theft by representation and faces up to 10 years in prison if convicted. He was ordered to appear in court March 30.
No attorney was listed for him in court records. A message left at a number associated with him was not returned Thursday.
The complaint in the case said a man reported to Waukesha police in 2021 that he was a victim of fraud. The man, identified as Victim A, said after he returned from a deployment to Afghanistan in 2007, he and other members of the military he served with, including Nitze, agreed to start a company at Nitze’s suggestion. Nitze told the others he was starting a limited liability corporation called Lapis, LLC, and solicited investors. Victim A reported giving $10,000 to the cause and he, Nitze and 11 others combined to pool together $102,138 to form a real estate venture.
Victim A said Nitze sent emails to the group of updates on real estate activities. The man said the group was not seeing any profits, but the investors understood that may take several years as proceeds from investments would be used in other real estate purchases. But based on Nitze’s reports, two investors invested more money in 2016, the complaint said.
Victim A reported receiving what appeared to be a statement from a bank in 2018 showing an account balance of $5,400, and information that the LLC was receiving dividends from three Sheboygan properties and one in West Bend, the complaint said. But after receiving no return on the initial investment from 2018 to 2021, the man asked Nitze about it. Nitze made several excuses as to why the dividends could not be paid, and never indicated the LLC had zero assets to fund it, the complaint said.
When Victim A went into real estate himself in 2021, he researched the properties Lapis purportedly owned and found the firm did not own them. Nitze told him he was going through a divorce, moving to Ohio and was separating himself from the LLC, the complaint said.
Police checking into the complaint went to Nitze’s home, where his wife was surprised to hear of the claims of a divorce and move to Ohio, the complaint said. Nitze told police he invested the funds in different banks than the one told to the investors, and he lied to them on statements "because he did not know how to tell everyone he lost their money," the complaint said. It added the bank accounts he cited showed no record of real estate activity.
Nitze said he started the LLC "with the best of intentions," the complaint said. But he lost $5,000 in earnest money in a Stevens Point property when the seller backed out. He lost another $20,000 in a Sheboygan transaction on a property that was foreclosed upon, the complaint said. On a third transaction, again in Sheboygan, he invested money but gave it to someone who was not the owner but the property was sold to someone else, the complaint said.
But Nitze lacked documentation on any of the purchases, telling police his records and a computer also containing them were destroyed in a flood of his basement, the complaint said.
Nitze said Lapis, LLC, never made any money and he knowingly defrauded the investors.
"The defendant stated he didn’t get the company going and was still unsuccessful in ever making a single purchase," the complaint said. "The defendant stated he made up all of these (statement) documents and sent them off to the investment group out of fear of telling them the truth that all of their money was gone for several years. In fact, no one in the investment group realized until 2021 that any fraud had occurred between 2007 and 2021, solely because of the defendant’s dishonesty and fraudulent activity throughout those years."
The state Department of Financial Information shows Lapis LLC was organized under Nitze’s name in 2007. The LLC was required to file annual reports but none show on the DFI website. A notice of delinquency was filed in 2009, and in 2011, the LLLC was given an administrative dissolution, records show. A DFI spokeswoman said the agency issues administrative dissolutions after three straight failures to file annual reports.
