Woodmere resident plead guilty in Ponzi scheme

Gershon Barkany of Woodmere plead guilty to wire fraud on Thursday at the federal courthouse in Central Islip. He faces up to 20 years in prison if convicted.

Between December 2009 and March 2013, Barkany, 29, told seven investors to give him $62 million, promising their money would be used in risk-free deals to purchase and then re-sell commercial real estate properties in New York City and New Jersey. No deals existed and the investors lost the money.

Barkany is the principal executive of more than 20 businesses based at 77 Spruce St. in Cedarhurst, and was arrested on March 28 by FBI agents.

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 the 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.

As part of his plea agreement with the government, Barkany said he would pay back the $62 million he stole from investors.