Delaware Businessman Pleads Guilty in $3.3M Ponzi Scheme
WILMINGTON, Del. – David C. Weiss, United States Attorney for the District of Delaware, announced today that Carl Chen, owner of Chenmax Properties, Inc., a Delaware Real Estate Investment Trust, and part-owner of Re/Max Sunvest Realty Co., pled guilty in federal court yesterday to wire-fraud charges for defrauding investors. Chen’s sentencing is scheduled June 21, 2019 before the Honorable Richard G. Andrews, United States District Judge for the District of Delaware. Chen faces a maximum penalty of 20 years of imprisonment.
According to court documents and statements made in open court, between 2013 and 2017, Chen a solicited Re/Max Sunvest Realty clients and others to invest $3.32 million,. Chen fraudulently represented the funds would be used to purchase real estate which would provide annual interest returns of 10% to 15% for the investors. Instead, Chen diverted the money from later investors to pay off interest obligations to prior investors.
In October 2017, Chen declared bankruptcy in the United States Bankruptcy Court for the District of Delaware, seeking to discharge millions in debts he owed to investors.
U.S. Attorney Weiss stated, “The defendant callously targeted vulnerable individuals and then defrauded them out of their hard-earned savings. My office will continue to prosecute those who seek to profit by criminally exploiting others.”
“The FBI in Delaware will continue to aggressively pursue those who defraud unknowing or unsuspecting victims who place their trust in individuals who misrepresent themselves as professionals," said FBI Baltimore Acting Special Agent in Charge Jennifer Moore. "These individuals, who prey on investors, enrich themselves and cause financial damage which may take years, if ever, for the victims to recover.”
This case was investigated by the FBI and the Office of the United States Trustee and is being prosecuted by Assistant U.S. Attorney Alexander P. Ibrahim and Special Assistant U.S. Attorney Hannah McCollum.