A Woodmere man who orchestrated a $62 million investment scam was sentenced in federal court Wednesday to 56 months in prison and must forfeit the amount he scammed from his victims, the U.S. attorney's office representing Long Island said.
Gershon Barkany, 34, had pleaded guilty to wire fraud in 2013 and faced up to 20 years in prison for convincing at least 10 investors to help buy "risk-free" commercial real estate in New York and New Jersey, properties that could purportedly resell immediately for a profit. But those deals never existed, and between December 2009 and March 2013, he created "fictitious documents," including sales and escrow agreements, to dupe investors, prosecutors said.
One victim invested $46.5 million as a down payment on an office building in Manhattan, a hotel in Atlantic City and properties in the Bronx and Queens, prosecutors said, but those deals did not exist.
Barkany's prison term will be followed by three years' supervised release and he must also pay restitution to his victims, along with the $62 million forfeiture, prosecutors said.
“Today’s sentence is the very real consequence for all the lies, forgeries and fabrications that Barkany used to steal from investors who thought they were putting their money into safe real estate deals,” Richard P. Donoghue, U.S. attorney for the Eastern District of New York, said in a news release.
Barkany used some of the money to repay investors he had defrauded earlier, lost some gambling in Atlantic City, and used some for his own benefit, authorities had said after the guilty plea.
The day Barkany plead guilty, his attorney, Bruce Barket of Garden City, told Newsday that his client had repaid more than $25 million since 2010, when he met with investors to confess he had "misappropriated" funds.
Not all of Barkany's deals were fake, Barket had said, describing his client as a decent man who would earn money to repay his victims.