Fraud! Rockaway Man Charged In Ponzi Scheme
FBI agents arrested Far Rockaway resident Gershon Barkany, 29, early on Thursday, March 28th, based on a criminal complaint he allegedly defrauded investors by promising to use their money in “risk-free” deals to purchase, and then immediately re-sell at a profit, large real estate properties.
According to the complaint, no such deals existed. The defendant allegedly defrauded victims of more than $50 million.
Court documents state 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.
One victim recounted that Barkany claimed the property sellers would only close on the real estate sales contracts after he had located a purchaser who would be willing to buy the property from him at a higher price.
Barkany assured the victim that this guaranteed the deals would be “risk free.”
The FBI confirmed the real estate deals, in fact, never existed. As part of this ‘Ponzi’ scheme, Barkany diverted some funds he received to pay ‘dividends’ to investors he had defrauded earlier to keep them paying in. He used the rest of the money for gambling and otherwise for his own benefit.
FBI Assistant Director in Charge George Venizelos stated, “As alleged, Barkany promised a get-rich-quick investment scheme that really had potential to enrich only him. There were no investment properties, just a house of cards built on a foundation of lies.”
If convicted, Barkany faces a maximum sentence of 20 years’ imprisonment.