A Philadelphia real estate agent defrauded investors of about $1.5 million by saying he would use their money for projects that could deliver lucrative returns but instead spent the funds to gamble and buy jewelry and tickets to sporting events, federal authorities said Friday.
Jonathan Barach faces charges of wire fraud and making an illegal monetary transaction. He was charged by information, which typically indicates a person intends to plead guilty.
Barach’s attorney, William M. McSwain — the region’s former U.S. attorney — said Barach “has taken full responsibility for his actions and has his life headed in the right direction. He has already paid back the majority of the money at issue and is continuing to pay the lenders what they are owed.”
Barach co-founded and serves as principal agent of the Barach Group, a real estate firm that on its website says it has closed more than $300 million in transactions since 2011.
Barach — who previously worked as a sports agent and negotiated several contracts for Eagles players, according to an online bio — also founded a company called TBG Real Estate. And federal prosecutors said in charging documents that he used both companies to solicit and raise money for what he described as short-term investment opportunities.
From 2017 through 2021, prosecutors said, Barach raised more than $3 million by making “misleading and fraudulent” promises, such as saying he would use investors’ funds to provide bridge loans for renovation projects, or to finance construction projects that had already been lined up.
In a PowerPoint presentation, prosecutors said, he also touted a 16% annual return on investment, and made misleading statements about how his companies had used loans in the past.
In reality, prosecutors said, after receiving his investors’ money, Barach used it for personal expenses, including payments to casinos and sportsbooks. The illegal transaction charge stems from allegedly moving $50,000 from his personal bank account — where some of the investors’ money was held — into a Tropicana Casino account.
Barach did repay some of his lenders, prosecutors said, though in some instances he did so with money he received from other investors.
In all, prosecutors said Barach had failed to repay about $1.5 million in investors’ money.