Former Owner of Lansing-Area Chain of Coffee Stores Sentenced to Federal Prison
David Lewis Many Defrauded Investors of Over One Million Dollars
|U.S. Attorney’s Office February 22, 2013|
GRAND RAPIDS, MI—U.S. District Judge Robert Holmes Bell sentenced David Lewis Many, 42, formerly of Lansing, Michigan, to 63 months in federal prison for his fraud scheme that bilked investors in his chain of coffee stores of over $1 million. The court further ordered Many to make restitution to his victims in the amount of $1,515,896.
“Our economy depends upon investors who are willing to assume legitimate business risks after receiving honest representations. Individuals like Mr. Many, who misrepresent the truth so that they can personally gain from the hard-earned money of honest individuals, will be prosecuted to the fullest extent of the law,” said U.S. Attorney Patrick A. Miles, Jr.
Many’s scheme began in 2006 when he started his first CornerStone Coffee Store with money from relatives, promising them employment that he never delivered. Many then attracted investors in additional stores by misrepresenting his personal net worth, claiming he gained special retail computer software skills while working as an engineer for Microsoft, representing that his business was profitable, and telling investors that he would not draw a salary from the company. In reality, the stores were losing money, and Many was drawing significant funds from the company to spend on an extravagant lifestyle that included luxury cars, an executive-style home, and entertainment at local gentlemen’s clubs.
By 2007, Many began selling franchise locations in an effort to satisfy obligations to prior investors and to try to keep his stores afloat. Many represented that a franchisee’s investment would be placed into an escrow account and used solely for the costs of constructing the franchise location. In reality, Many defrauded the franchisees by obtaining hundreds of thousands of dollars up front and then using the money for his personal benefit and to operate his existing corporate locations. The last franchisee invested over $280,000 for his store location but received nothing but a building with stud-walls and a dirt floor. Many then fled to Texas.
The Lansing Resident Agency of the Federal Bureau of Investigation conducted the investigation. Assistant U.S. Attorney Ronald M. Stella conducted the prosecution.