A Manhasset woman, claiming to own three skyscrapers in Japan, defrauded real estate investors out of more than $10 million over more than eight years, according to an indictment unsealed Thursday by federal prosecutors.
Grace Kay, 74, was arrested Thursday morning and arraigned in U.S. District Court in Brooklyn on a charge of wire fraud. She pleaded not guilty and was released on her own recognizance, with travel restricted to New York State.
U.S. Magistrate Judge James Orenstein also ordered Kay to be evaluated for mental health treatment and directed her not to contact any of the alleged victims involved in the real estate transactions. If convicted, she faces up to 20 years in prison.
“As alleged in the indictment, Kay devised a real estate scheme built on tall tales to fleece investors out of millions of dollars,” said Richard Donoghue, U.S. attorney for the Eastern District. “With today’s arrest, this office begins the process of bringing justice to the victims.”
Prosecutors said that between Jan. 1, 2010, and April 15 of last year, Kay and several unnamed co-conspirators falsely told investors that she had inherited real estate in Japan, including three skyscrapers.
Kay told the investors that she was required to pay a host of fees and taxes to sell the properties and return a profit to the investors. The investors provided Kay with more than $10 million, which she then stole for her personal use, prosecutors said.
Assistant federal defender Amanda David, who was assigned to her case, did not respond to a request for comment.
Kay is due back in court on March 25.