Contact 6: Man steals from real estate investors through Ponzi scheme

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MILWAUKEE -- He promised investors big returns in a house flipping business, but instead, he ran a Ponzi scheme that took millions from over 170 people. So, how did he do it? FOX6's Contact 6 offers a closer look.

Investing in real estate can be a sound investment -- so when investors heard they could make a 12% return on their money by investing in a business that was buying and then quickly selling houses, hundreds signed up.

The problem: Donald Lacey, the former police officer who pitched them wasn't trying to make them money.

"What Mr. Lacey didn't tell his investors was that the money was going to three entities under his control, and he took the money for personal use," U.S. Postal Inspector Meredith Newman said.

Postal inspectors say Lacey's investment scam cost over 200 people over $9 million.

"That money was spent on homes, vehicles, boats -- things along those lines," Newman said.

Authorities say Lacey used his position as a former police officer to cheat those around him.

"Mr. Lacey was highly-regarded in the community. The people he solicited from were people he knew very well based on his reputation," Newman said.

Postal inspectors say it is so important for investors to do their due diligence before investing any money. 

Those who believe they may be a victim of a Ponzi-related scheme or any crime related to the U.S. Mail can call 1-877-876-2455 or file a complaint with postal inspectors online.