A real estate investor was sentenced to 11 years and three months in prison for running a scheme that scammed victims of more than $5 million, according to the U.S. attorney’s office.

For roughly a decade, Abbe Edelman, 51, of Livingston, N.J., conducted an elaborate real estate investment fraud Ponzi scheme, duping victim-investors to provide him with money purportedly to buy and sell real estate and earn large returns on their investments.

“In reality, neither Edelman nor any of his real estate companies had a history of purchasing any bank-foreclosed properties,” the office of New Jersey U.S. Attorney Paul Fishman said in a statement.

Beginning in 2004, Edelman operated through several companies alleged to be in the business of buying and selling real estate.

He told investors that he had significant past real estate experience including a purported history of successfully buying and selling numerous bank foreclosed properties, and an MBA degree from NYU in real estate finance.

Edelman also claimed that he had longstanding relationships with banks that provided him with unique access to purchase foreclosed properties at below market prices and, in fact, already had negotiated with the banks to purchase certain properties at agreed-upon prices that would guarantee an easy resale and profit for investors.

“He did not have any deals lined up involving any investment properties, did not have his own money invested in any such deals, and did not have money from celebrity investors,” the statement said.

In addition, Edelman promised investors that any investment would be used solely for the purchase, renovation or sale of specific investment properties in, among other places, New York, New Jersey, California, and Florida.

Edelman also told his investors that he could obtain extraordinary returns – as much as 25%, in as little as eight to 12 months.

He purportedly told some victims that he had received from other investors, including professional athletes and celebrities, the majority of the capital needed to purchase the investment properties. He also said he had provided cash deposits to the financial institutions to secure the right to purchase the investment properties and invested his own money in the deals.

In reality, neither Edelman nor any of his real estate companies had a history of purchasing any bank-foreclosed properties. Edelman also did not possess even an undergraduate degree. He did not have any deals lined up involving any investment properties, did not have his own money invested in any such deals, and did not have any money from celebrity investors.  Edelman induced investors to give him more than $5 million; none of it was used to fund any real estate acquisitions or renovations, but was instead diverted for his own use.

Edelman used his victims’ money for his home mortgage and day-to-day living expenses, such as restaurants, telephone, and gas bills. He purchased merchandise from high-end retailers, such as Gucci and Neiman Marcus, repaid existing investors in Ponzi-scheme fashion, and paid his legal expenses in connection with victims seeking repayment of their investment.

In some cases, to allow the scheme to continue undetected, Edelman made “lulling” payments to investors, ranging from $100 to tens of thousands of dollars, to permit the scheme to continue.

When payments were made to any investors, Edelman generally represented that the money was from the sale of investment properties, when, in fact, it came from a new investor.

In addition to the prison term, Judge Wigenton sentenced Edelman to serve three years of supervised release and pay $3,121,279 in restitution to his victims.