Dallas Man Charged in $26 Million Real Estate Scam Involving Chinese Investors - Benzinga

A Dallas real estate developer accused of scamming Chinese investors out of more than $26 million was indicted Tuesday on charges of wire fraud and securities fraud.
Timothy Lynch Barton, 59, president of JMJ Development Inc. and CEO of real state investment firm Carnegie Development, allegedly traveled to Hangzhou, China, to market real estate investment opportunities in Texas to Chinese investors.
During his presentations to potential investors, Barton claimed that the properties were located in sought-after neighborhoods in the Dallas/Fort Worth metropolitan area, according to the U.S. Attorney’s Office for the Northern District of Texas. He also introduced a builder, identified as S.W. in court documents, who he said would purchase lots to build on and sell to future homebuyers.
Barton allegedly promised investors annual interest payments for two years and told them that their initial investment would be returned at the end of the second year. He is accused of telling investors that they would contribute 80% of the funds needed for the project and he and others would kick in 20% and saying that no commissions would be paid out of investor funds.
In loan agreements signed by investors, Barton allegedly inflated the cost of each property by as much as 195% and, in some instances, never purchased the property. He also is accused of paying interest payments to early investors with investor funds from later projects.
Prosecutors say Barton paid commissions out of investors’ funds and funneled their money into unrelated projects. Other funds were used to pay consultants and an unrelated company’s American Express bill, according to the indictment.

Barton was indicted on seven counts of wire fraud, one count of conspiracy to commit wire fraud and one count of securities fraud.
If convicted, Barton faces up to 20 years in federal prison for each count of wire fraud, up to 20 years for conspiracy to commit wire fraud and up to 20 years for securities fraud.
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

Enter your email address to be the first to know about new offerings for real estate, startups and other alternative investments with strong potential returns.

source