New Jersey Man Pleads Guilty in Real-Estate Ponze Scheme
A New Jersey man pleaded guilty to charges that he defrauded investors in a real-estate Ponzi scheme.
David Connolly, 51, of Watchung, pleaded guilty today to one count of money laundering and one of securities fraud, according to a statement by U.S. Attorney Paul Fishman.
From 2006 through 2009, Connolly took in more than $50 million from more than 200 victims of a real-estate investment fraud that resulted in losses of at least $9 million, prosecutors said.
He told investors their money would buy properties that would generate rental income to pay distributions, the government said. Connolly misrepresented the properties’ condition, financial performance and amount of equity, prosecutors said.
In 2009 the scheme collapsed when Connolly began to default on mortgage payments.
Sentencing is set for June 4. Connolly faces maximum penalties of 20 years in prison on the securities fraud count and 10 years for money laundering. He may be fined as much as $5.25 million.
Connolly entered the plea before U.S. District Judge William Martini in Newark.
The case is U.S. v. Connolly, 12-343, U.S. District Court, District of New Jersey (Newark).
To contact the editor responsible for this story: Michael Hytha at mhytha @bloomberg.net.