Fraudster Confesses To Using Investors' Money To Pay $16K Malibu Rent: DOJ

LOS ANGELES, CA — A former Malibu resident admitted in court that he defrauded several investors out of $3 million and used the money to pay his $16,000 monthly rent in Malibu, the U.S. Department of Justice announced.

Frank Harold Rosenthal, 48, who currently lives in New York City, pleaded guilty on Friday to two counts of wire fraud in federal court in Los Angeles, according to the DOJ.

Rosenthal admitted that he lured investors in with false claims that his inside connections at Goldman Sachs allowed him special access to discounted shares of Alibaba before the Chinese ecommerce giant's initial public offering, prosecutors said.

He paid earlier victims with money from his later victim's funds and used the money to pay for his "lavish lifestyle," prosecutors said.

Prosecutors claim that Rosenthal used a middle man, David Kunkle, by making fraudulent representations and pressured Kunkle to solicit funds from his relatives and acquaintances.

Rosenthal faces a maximum sentence of 40 years in federal prison. He's due back in court in October for sentencing.