Senior Housing Developer Charged with Defrauding Investors

A Madison man is embroiled in a fraud case involving selling property he had put up as collateral for another project he was working on, according to a criminal complaint document from the state of Wisconsin.

Robert Niebauer, the former president of Professional Realty and Development Corp., has been charged with three counts of transferring encumbered property, after he allegedly sold three portions of a senior housing development located in Dubuque, Iowa, which he had previously provided as collateral to get $2.4 million in loans for his Richmond Terrace project, located in Appleton.

The case dates back to early 2005, when, in a bid to get funds for the struggling Richmond Terrace project, Niebauer pledged eight limited liability corporations (LLCs) from Angelus Retirement Community in Dubuque, worth $300,000 each, as collateral to two investors. Each investor gave Niebauer $1.2 million, for a total of $2.4 million, with an annual interest of 20%.


At some point, Niebauer sold off two of the LLCs, using the $600,000 in proceeds to pay off part of his collateral. In the next couple of months, he allegedly sold off more LLCs, but did not put all of the proceeds toward paying back the investors, going against the terms of his collateral agreement.

The terms of the purchase agreements for transferring membership interest to the buyers provided that Niebauer, as the seller, owned 100% of the outstanding membership interests in the LLCs, “free and clear of all liens, security interests, restrictions,” etc.

The three investors say they would not have invested in the LLCs had they been fully aware of Niebauer’s financial situation or the encumbrance on the property; they each allegedly lost up to $300,000. Niebauer declared personal bankruptcy in 2007, and his firm filed for Chapter 7 bankruptcy two years later, in August 2009.


Each individual charge is a Class E felony, with a potential penalty of 15 years in prison, or a $50,000 fine, or both. Niebauer is scheduled to appear in court on Sept. 28.

View the criminal complaint document here.

Written by Alyssa Gerace

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