KIRKWOOD — A developer who swindled almost $400,000 from six families who sought new homes in Kirkwood was sentenced Friday to 12 months in prison.
Morgan Bullock, 33, also faces three years of supervised release.
Bullock took the aspiring homeowners’ deposits for new homes, some even after the city of Kirkwood denied his development application because he and his company failed to post a performance guarantee designed to protect homeowners, prosecutors said.
When the families learned about lawsuits piling up against Bullock, or lost patience with the repeated delays, Bullock either refused them a refund or spent months making false promises of repayment, according to prosecutors and statements of those families.
In a letter to the judge, one couple wrote that their family of five spent two years in temporary housing, moved four times and spent nearly $50,000 on rent and storage fees awaiting their new home, in addition to the $60,000 deposit they gave Bullock.
“We can’t count the number of times we’ve had to console crying children who just wanted their favorite stuffed animals back (out of storage),” the couple wrote. They said that period was “marked by incredible stress, anger, frustration, depression and sadness.”
Another hopeful couple wrote that Bullock sent them on a series of “wild goose chases” after he wrote a bad check for the refund of their $50,000 deposit. They had sold their home and moved into an apartment while waiting for their new home and had to dip into their retirement savings to find a new place to live.
“Even when it became completely obvious that we were victims of an intentional fraudulent scam, Bullock remained smug, arrogant ... When I informed him that I was going to report him to the authorities, he simply said, ‘Do what you think you have to do, I don’t care. But you won’t get your money back that way,’” the letter continues.
Bullock pleaded guilty in federal court in St. Louis in July to one count of wire fraud.
Bullock, the owner and operator of Bullock Building and Development LLC, had organized a real estate investment group, Silver8 LLC, that bought a property on Emmerson Avenue that was intended to be developed into eight home sites, his plea agreement says. Bullock admitted spending the families’ money on personal expenses and “to prop up business activities totally unrelated to the Kirkwood property,” Assistant U.S. Attorney Hal Goldsmith wrote.
Faced with a requirement to submit $533,876 in cash or a letter of credit to get his final subdivision plan, Bullock balked and pulled his proposal in 2017. But he continued to market the homes, the plea says. He also failed to tell buyers that his company declared bankruptcy in January 2018, Goldsmith wrote, and blamed the city, weather or subcontractors for delays.
He faced roughly 21 to 27 months in prison under recommended federal guidelines, and Goldsmith asked for a sentence in that range.
U.S. District Judge Audrey Fleissig, after likening Bullock’s crime to a Ponzi scheme, gave Bullock a lesser sentence because she said she didn’t believe he intended to defraud the families at the outset of the development project.
Bullock’s lawyer, Michelle Nasser, asked for probation, saying in a court filing that he has “sincere remorse” and was “acknowledging without hesitation his actions were wrong and unacceptable.” She said Bullock also suffered shame and embarrassment.
“I took your money, you trusted me, and I broke that trust,” Bullock said of the victims in court Friday. “I failed you. ... I am truly sorry and ashamed.”
Nasser said Bullock has paid $230,000 in restitution to the victims so far. As part of his sentence, Bullock must pay $136,459 more and complete 40 hours of community service. He will be free on bail until at least January, when he’s required to report to a federal prison.
Goldsmith said Bullock was focusing only on the effects on himself, and had failed to mention the harm to his victims.
He “held himself out as a respected and accomplished home builder and real estate developer,” Goldsmith wrote in a court filing. “In no small way, defendant sold dreams; the dream that every family has to live in a nice home in a good neighborhood where they can raise their children or live out their retirement years. Through his fraudulent scheme, defendant shattered those dreams, and abused the trust of each of the victims based upon his continuous and ongoing false representations.”