Preet Bharara, the United States Attorney for the
Southern District of New York, announced that Edward Adams, a New
York-based attorney, pled guilty today in Manhattan federal court to
conspiracy to commit wire fraud in connection with his participation in a
fraudulent real estate scheme. As part of that scheme, Adams and a
co-conspirator misappropriated millions of dollars in escrow funds that
should have been safeguarded for investors in a real estate development
project. The real estate project was never developed and investors lost
all of their money. Adams pled guilty before U.S. District Judge John G.
Koeltl.
According to the information, statements made during today’s guilty plea proceeding, and a complaint previously unsealed in Manhattan federal court:
Beginning in early 2008, Adams and James Monahan, a former sergeant in the New York City Police Department and the owner of a real estate investment company called Panam Management Group, Inc., negotiated with another real estate investment company to solicit investors for a project Monahan claimed to be constructing in the Dominican Republic. In connection with the project, Adams and Monahan executed agreements that required investor funds to be deposited into escrow accounts that were to be managed by Adams. From October 2008 through February 2009, approximately $4.7 million in investor funds were deposited into the escrow accounts. Shortly after the deposits were made, the funds were improperly withdrawn by Adams and Monahan without disclosure to investors.
In an effort to hide the fact that the funds had been removed from the escrow account, Monahan mailed a forged letter on the stationery of a major bank to investors in May 2009 claiming that their money was safely deposited with that bank. However, by June 2009, all of the investor funds had been taken from the escrow accounts. At that point, almost no work had been performed on the purported project in the Dominican Republic. None of the money was returned to investors.
Adams, 69, of New York, New York, pled guilty to one count of conspiracy to commit wire fraud, which carries a maximum potential penalty of five years in prison and a fine of $250,000, or twice the gross gain or loss from the offense. He is scheduled to be sentenced by Judge Koeltl on October 18, 2013, at 10:00 a.m.
Monahan pled guilty on May 29, 2013, and is scheduled to be sentenced by Judge Koeltl on October 4, 2013, at 10 a.m.
Mr. Bharara praised the work of the Federal Bureau of Investigation.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which Mr. Bharara serves as a co-chair of the Securities and Commodities Fraud Working Group. The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney John T. Zach is in charge of the prosecution.
According to the information, statements made during today’s guilty plea proceeding, and a complaint previously unsealed in Manhattan federal court:
Beginning in early 2008, Adams and James Monahan, a former sergeant in the New York City Police Department and the owner of a real estate investment company called Panam Management Group, Inc., negotiated with another real estate investment company to solicit investors for a project Monahan claimed to be constructing in the Dominican Republic. In connection with the project, Adams and Monahan executed agreements that required investor funds to be deposited into escrow accounts that were to be managed by Adams. From October 2008 through February 2009, approximately $4.7 million in investor funds were deposited into the escrow accounts. Shortly after the deposits were made, the funds were improperly withdrawn by Adams and Monahan without disclosure to investors.
In an effort to hide the fact that the funds had been removed from the escrow account, Monahan mailed a forged letter on the stationery of a major bank to investors in May 2009 claiming that their money was safely deposited with that bank. However, by June 2009, all of the investor funds had been taken from the escrow accounts. At that point, almost no work had been performed on the purported project in the Dominican Republic. None of the money was returned to investors.
Adams, 69, of New York, New York, pled guilty to one count of conspiracy to commit wire fraud, which carries a maximum potential penalty of five years in prison and a fine of $250,000, or twice the gross gain or loss from the offense. He is scheduled to be sentenced by Judge Koeltl on October 18, 2013, at 10:00 a.m.
Monahan pled guilty on May 29, 2013, and is scheduled to be sentenced by Judge Koeltl on October 4, 2013, at 10 a.m.
Mr. Bharara praised the work of the Federal Bureau of Investigation.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which Mr. Bharara serves as a co-chair of the Securities and Commodities Fraud Working Group. The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney John T. Zach is in charge of the prosecution.
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