Cedarhurst Ponzi schemer out on bail

Gershon Barkany, a Cedarhurst-based businessman accused of defrauding real estate investors of more than $50 million, was released on bail on April 9. Barkany is restricted to his home and surrendered his passport.

FBI agents arrested Barkany, 29, a Far Rockaway resident who is the principal executive of more than 20 businesses based at 77 Spruce St. in Cedarhurst, on March 28.

He 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 alleged scheme was conducted between January 2009 and December 2010.

None of these deals existed, according to the FBI. 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.

Allegedly, 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.

Attorney Bruce Barket, who is representing Barkany, said his client is cooperating with the investors to help them recover as much of the money as possible.

If convicted, Barkany faces a maximum of 20 years in prison.