Home News Dallas developer faces charges of scamming Chinese investors out of $26 million

Dallas developer faces charges of scamming Chinese investors out of $26 million

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A Dallas real estate developer allegedly scammed more than $26 million from a Chinese man who believed he was investing in a property in North Texas, instead using the money for personal expenses such as the purchase of a commercial aircraft. was prosecuted by the federal government.

Timothy Burton, president of JMJ Developments and CEO of investment firm Carnegie Developments, has been sentenced to decades after being convicted of charges including seven counts of wire fraud, one count of wire fraud conspiracy and one count of securities fraud. may spend time in prison.Attorney for the Northern District of Chad Meacham, Texas said on monday.

Separately, the U.S. Securities and Exchange Commission accused Barton, Carnegie Homes homebuilder Steven Wall and businessman Hu Chang Hu of making “fraudulent real estate investment proposals.” The commission said in a lawsuit Monday.

When asked for comment, Melanie Bonvicino, a spokeswoman for JMJ Development and Barton, said in a statement that she was “committed to vigorously addressing” both the SEC and FBI allegations and that she would “react appropriately on all matters.” We aim to reach a solution,” he said. On hold. “Wall and Fu were not reached for comment on Monday.

Barton traveled to Hangzhou, China, to pitch Texas real estate investment opportunities to Chinese investors, and said in a presentation that the property was in the popular Dallas-Fort Worth neighborhood, according to the U.S. Attorney’s Office. Government prosecutors also said the builder, identified as SW in court documents, will purchase land to sell to prospective homebuyers.

According to US lawyers, Burton would pay investors two years of annual interest, then promised to recoup their investment at the end of the second year, with investors giving away 80% and he and others paying 20%. said to lower the %. He is also said to have told investors that no fees will be taken out of their funds.

Burton inflated the price of each property by as much as 195% and, in some cases, did not actually purchase the property, government prosecutors argued, while Burton paid early investors interest on the investment funds from later projects. added. They also allege that Burton paid commissions out of investor money, funneled investor money into unrelated projects, and used other funds to pay American Express bills for consultants and unrelated companies.

According to the SEC, Barton, Wall and Fu sold securities to more than 100 investors, mostly Chinese, through a limited liability company they controlled. According to the SEC, Burton and Hu provided documentation to investors that the investment would be used solely to purchase specific real estate parcels for residential development and would be fully repaid with interest within two years.

In the lawsuit, Burton, Wall and Hu said they told investors they were actually buying properties for as much as three times the price they were contracted to pay. The SEC said the three had financed Burton’s personal lifestyle, including paying other investors, buying properties in Burton’s other company’s name, paying sales commissions to Hu, and buying a private plane. It said it diverted nearly all of the investor’s money to provide it.

The property was never developed and investors were not repaid, according to the SEC. The agency’s lawsuit seeks civil penalties and an injunction barring Burton, Wall, and Hu from serving as officers or directors of public companies.

If convicted, Burton faces up to 20 years in federal prison for wire fraud, up to 20 years for conspiracy to commit wire fraud, and up to 20 years for securities fraud. the federal prosecutor’s office said.

Chinese investors agree to fund development deals Moved in April 2020 to bankrupt the projectincluding hundreds of acres in Kauffman, Tarrant, Johnson, and Parker counties, dallas morning news Previously reported. The entities associated with these developments filed for bankruptcy in August and September 2022, court documents show.

Over the years, Burton and JMJ have proposed several major projects in North Texas, but never ground them. Frisco Hotel and Residential Towera high-rise condominium and Mandarin Oriental hotel in Turtle Creek, Dallas, and another project in Dallas’ Design District.

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