Jeffrey Egan, a 51-year-old resident of Troy, Michigan, pleaded guilty on Thursday to Bank Fraud in connection with an investment fraud scheme in which over a dozen victims were defrauded of over $1 million, announced United States Attorney Barbara McQuade. McQuade was joined in the announcement by Special Agent Andrew G. Arena of the Federal Bureau of Investigation.

Egan, operated a company called Real Estate Capital Group (RECG) from 2004 through 2008. He promised investors an 11% annual interest rate for a period of two years and promised investors that their investments were fully secured with real estate. In order to convince investors that their funds were not at risk, Egan would provide investors with written mortgages for properties that he claimed RECG had acquired with their funds. In reality, many of the mortgages were never recorded or were phony mortgages for properties in which RECG and Egan had no ownership right. Egan ultimately failed to pay
the interest rates that he promised or return the principle funds to investors when the term
of their investment expired.

As part of his plea agreement, Egan has agreed to pay restitution in the amount of $7,934,727 to both defrauded investors and other investors who lost money by investing in RECG and other business ventures owned by Egan.

Egan faces a maximum of 30 years in prison. The suggested range for his sentence under the federal sentencing guidelines is 57 to 71 months imprisonment. Egan is scheduled to be sentenced before United States District Court Judge George Caram Steeh on September 6, 2012 at 2:00 p.m.

The case is being prosecuted by Assistant United States Attorney Louis P. Gabel.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return to Top