A San Francisco real estate developer pled guilty to charges that he operated a Ponzi scheme that took in more than $25 million from investors. Maher Talal Muhawieh, 32, pled guilty to one single count of wire fraud, which carries a maximum sentence of twenty years in federal prison, along with a fine of up to $250,000 and restitution to defrauded investors. Muhawieh had originally been indicted on twelve counts of wire fraud.
According to the Department of Justice, Muhawieh represented to victims that their funds would be used to purchase and to renovate specific residential properties in San Francisco that would then be sold at a profit. Potential investors were told that they would receive guaranteed high rates of return, and that their funds were secured with deeds of trust on the properties supposedly purchased. In reality, Muhawieh operated an elaborate Ponzi scheme that used investments from new lenders to repay older investors. Muhawieh also used investor funds for a variety of unauthorized activities such as personal expenses and investing in retail businesses located in San Francisco.
Muhawieh is scheduled to be sentenced March 7, 2012.
A link to the criminal indictment is here.