Cedarhurst-based businessman charged in $50M Ponzi scam

Far Rockaway man allegedly used money to gamble and pay previous investors


Gershon Barkany, a Far Rockaway resident who is the principal executive of more than 20 businesses based at 77 Spruce St. in Cedarhurst, was arrested on March 28 by FBI agents and charged with defrauding investors of more than $50 million through phony real estate deals.

Barkany, 29, allegedly promised to use investor money in “risk-free” deals to purchase and then quickly re-sell — at a profit — large-sized properties in New York City and New Jersey.

The criminal complaint alleges that none of these deals existed. Barkany allegedly used a portion of the investors’ money to pay other investors he supposedly previously defrauded and lost some of the money gambling, and also donated money to an unidentified charity.

“Barkany’s victims sought the security of investing in real estate. Instead, they were taken for millions by the defendant’s lies and deception,” U.S. Attorney Loretta E. Lynch stated in a release.

According to the complaint, Barkany persuaded at least five investors to wire substantial amounts of money to supposedly buy properties in Manhattan, Queens, the Bronx, and Atlantic City. One of the investors said Barkany claimed that the sellers would only close on the real estate contracts after Barkany had found a buyer willing to purchase the property at a higher price, assuring the investor that the deals would be “risk-free.”

The investors are from Woodmere, Far Rockaway, Lakewood, N.J. and two from upstate Monsey.

“As alleged, Barkany promised a get-rich quick investment scheme that really had potential to enrich only him. There were no investment properties, just a house of cards built on a foundation of lies. There may no truly risk-free investments. But investors are entitled to honesty,” FBI Assistant Director in Charge George Venizelos stated in a release.

If convicted, Barkany faces a maximum of 20 years in prison. He is in custody pending a future bail hearing and was not required to plead to the charge during his initial court appearance at the U.S. Courthouse in Central Islip on March 28.