BULLETIN: Feds Say New York Man Was Running $50 Million Real-Estate Ponzi Swindle; Gershon Barkany Arrested By FBI
BULLETIN: A man in the Far Rockaway section of the New York City Borough of Queens was running a $50 million real-estate Ponzi swindle that duped investors into believing they were investing in a “risk-free” flipping scheme involving large properties in New York and New Jersey, federal prosecutors said.
Gershon Barkany, 29, was arrested today by the FBI.
“As alleged, Barkany promised a get-rich-quick investment scheme that really had potential to enrich only him,” said George Venizelos, assistant director-in-charge of the New York FBI office. “There were no investment properties, just a house of cards built on a foundation of lies.”
From a statement by the office of Loretta E. Lynch, the U.S. Attorney for the Eastern District of New York (Italics added):
According to the criminal complaint that was unsealed this morning, Barkany induced at least five investors to wire transfer large sums of money supposedly to purchase real estate in Manhattan, Queens, the Bronx and Atlantic City, New Jersey. According to one of the investor victims, Barkany claimed that the sellers of these properties would only close on the real estate sales contracts after Barkany had located a purchaser who would be willing to buy the property from Barkany at a higher price. In that way, Barkany assured the victim that the real estate deals would be “risk free.”
In fact, the real estate deals did not exist. As part of Barkany’s Ponzi scheme, he diverted some of the funds he received to pay investors whom he had earlier defrauded. The defendant also lost some of the funds in gambling and otherwise used the money for his own benefit.