A Philadelphia real estate agent was sentenced to 37 months’ imprisonment and two years of in connection with a scheme in which he raised millions of dollars from individuals and businesses, supposedly for short-term real estate financing opportunities, when no such projects existed.
Jonathan Barach was a licensed residential real estate agent who served as co-founder and principal agent for The Barach Group LLC and TBG Real Estate LLC, both based in Philadelphia.
Between July 2017 and April 2021, Barach raised over $3 million from lenders through a series of material misrepresentations, including by falsely stating the raised funds would be used to provide bridge loans to builders and contractors looking to purchase and flip distressed real estate properties or to complete renovation projects. However, Barach never had any projects that required funding and planned to use the lenders’ funds to cover personal expenses.
Although Barach paid back some of his earlier lenders with a portion of the funding secured from later lenders, over $1.4 million of the fraudulently obtained loan proceeds remain unpaid.
The defendant was charged last August and pleaded guilty in September to one count of wire fraud and one count of making an illegal monetary transaction. In addition to his prison term, Barach was ordered to pay a forfeiture judgment of $1.4 million, victim restitution in the amount of $1.4 million, and a $200 special assessment.
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