TLDR
- A 59-year-old Goldens Bridge, New York, man is charged with wire fraud.
- Prosecutors say he claimed his firm managed over $750 million in assets.
- He allegedly admitted on a phone call that no investments were ever made.
- Friends, family and other victims lost more than $5 million.
- He faces up to 20 years in prison if convicted.
A New York man who said his real estate firm managed more than $750 million in assets never made a single investment, federal prosecutors allege. The 59-year-old from Goldens Bridge, identified as A.L., is accused of taking over $5 million from investors.
Prosecutors say he spent much of that money on gambling and personal expenses. He now faces a wire fraud charge.
The charges were announced by the US Attorney’s Office for the Southern District of New York. Goldens Bridge is a small community in northern Westchester County. The office has not said how much A.L. wagered or which gambling operator he used.
A Business That Existed Only on Paper
According to prosecutors, A.L. presented himself as a retail property investor. He told victims he would put their money into real estate and promised them large returns.
Investigators say the business was only a front. The money was never placed into any property deals, and no properties were bought with investor cash.
To keep the scheme going, A.L. allegedly used deposits from new investors to pay returns to earlier ones. Early investors received payments that looked like real profits. That is the basic structure of a Ponzi scheme.
He also created fake documents to back up his story, prosecutors say. The papers described investment properties and the returns investors could expect. Prosecutors described the scheme as highly sophisticated.
Many of his first victims were people close to him. Prosecutors say he used the trust of friends and family members to get the scheme started.
The $750 million figure was part of the image A.L. built for his firm. That figure stood in sharp contrast to what investigators found. Prosecutors point to a phone call in which he allegedly admitted that no investments had been made at all.
The scheme eventually fell apart. Authorities then traced the flow of money and uncovered how the operation worked. The investigation led to the wire fraud charge he now faces.
A Similar Case Involving Crypto Investors
The New York charges follow a case in Connecticut that also tied investor fraud to gambling. In October, a 25-year-old man from Wolcott, identified as E.R., pleaded guilty in that case.
E.R. admitted to defrauding more than 10 cryptocurrency investors out of about $1.1 million. Like A.L., he promised his victims high returns. The victims believed their money would be invested for profit.
Instead of investing the funds, E.R. sent them to Stake.com, an offshore online gambling platform. Authorities say his gambling losses topped $1.15 million. That amount was slightly higher than what he took from investors.
In both cases, victims handed over money they believed was being invested. Recovering funds can be hard once they have been lost through betting.
Unlike the Connecticut case, the New York case has no reported gambling loss figure. Prosecutors say the total taken from New York investors is more than $5 million.
A.L. is charged with wire fraud, and the case is being handled in federal court in New York. If convicted, he could face up to 20 years in prison.
