Gershon Barkany told investors he would use their money in "risk free" deals to purchase and then immediately resell at a profit large real estate properties located in New York and New Jersey, according to the New York Federal Bureau of Investigation.
However, the complaint noted that such deals never existed and Barkany allegedly used $50 million he obtained from the investors for his own benefit.
Barkany induced a handful of investors to wire-transfer large sums of money supposedly to buy real estate in various cities.
"Barkany’s victims sought the security of investing in real estate. Instead, they were taken for millions by the defendant’s lies and deception," said Loretta Lynch, U.S. Attorney for the Eastern District of New York.
She added, "As alleged, the promised high returns were only for him, as he used his victims’ money to gamble and keep his scheme afloat."