Real Estate Developer Charged And Pleads Guilty To Multi-Year Investment Fraud Scheme

Jay Clayton, the United States Attorney for the Southern District of New York, and Edward Gallashaw, the Acting Inspector in Charge of the New York Division of the United States Postal Inspection Service (“USPIS”), announced today the filing of an Information charging BARRY BREEMAN with engaging in a scheme to defraud investors who believed they were investing in real estate developments.  BREEMAN also entered a guilty plea to the Information in a proceeding today before U.S. Magistrate Judge Stewart D. Aaron.  The case has been assigned to U.S. District Judge Gregory H. Woods.  

U.S. Attorney Jay Clayton said: “As he admitted today in federal court, Barry Breeman stole more than $13 million dollars from dozens of investors. He falsely represented to investors that they were investing in valuable real estate projects, but in reality, Breeman had no connection to these investments and pocketed their money.  Breeman’s conduct has led to his conviction, and he now faces serious time in federal prison for his fraud scheme.”

USPIS Acting Inspector in Charge Edward Gallashaw said: “Investors placed their trust in Breeman, who devised a scheme to mislead and defraud investors out of more than $13 million.  His arrest demonstrates that the U.S. Postal Inspection Service is dedicated to investigating fraud and bringing to justice those who break the rule of law.”

According to the allegations contained in the Information:

From at least in or about 2018, up to and including at least in or about 2024, BREEMAN solicited investments in various real estate projects through false and misleading statements and then misappropriated investor funds by diverting them for personal use.

For years, BREEMAN worked as a real estate developer specializing in projects in Latin America.  In or about 2018, after suffering a professional setback in his legitimate real estate business, BREEMAN began to solicit investments in sham real estate projects to make up for the loss of income in his legitimate business.  In particular, BREEMAN encouraged prospective investors to buy limited partnership interests in certain Latin American real estate deals by sending them promotional photographs, prospectuses, and business projections and by promising quarterly distributions. BREEMAN, however, fabricated these investment opportunities and, in fact, often had neither a connection to the projects he promoted nor authority to sell partnership interests in them.

When investors did send BREEMAN money, he applied their funds to personal expenses, among other things, and did not use investor funds to develop the real estate projects he had described.  BREEMAN obtained more than $13 million from approximately 30 investors during the course of his fraud scheme.

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BREEMAN, 75, of Tuxedo Park, New York, is charged with one count of securities fraud, which carries a maximum sentence of 20 years in prison.

The maximum potential sentence in this case is prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Clayton praised the outstanding work of the USPIS. 

This prosecution is being handled by the Office’s Securities and Commodities Fraud Task Force.  Assistant U.S. Attorney Daniel G. Nessim is in charge of the prosecution.