Nassau Man Sentenced For Running $62 Million Ponzi Scheme

On Wednesday, Gershon Barkany was sentenced to 56 months in prison for his role in a Ponzi scheme that defrauded of investors of $62 million.

In addition to the prison time, Barkany, 34, of Woodmere, was sentenced to three years of probation after prison and will have to pay restitution (which will be determined later) and pay forfeiture of $62 million. Barkany pleaded guilty to wire fraud in June, 2013.

“Today’s sentence is the very real consequence for all the lies, forgeries and fabrications that Barkany used to steal from investors who thought they were putting their money into safe real estate deals,” said United States Attorney Richard Donoghue. “This office will vigorously prosecute those who betray their clients’ trust for their own financial self-interest.”

Between December 2009 and March 2013, Barkany persuaded more than 10 people to invest $62 million by telling them he'd use their money in "risk-free" deals to buy and resell real estate in New York City and New Jersey. The deals were fake, and the investors lost everything they put in.

One person, believing Barkany, invested $46.5 million as a down payment on an office building in Manhattan, a hotel in Atlantic City and properties in the Bronx and Queens.

To perpetuate the scheme, Barkany created false documents, including purchase agreements and escrow agreements.

Barkany used some of the money he received to pay people he had defrauded earlier, and then used about $7.8 million to pay for personal expenses and gambling.

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