Philly real estate agent pleads guilty to defrauding investors and using money on gambling, personal expenses
By Michael Tanenbaum
Copyright phillyvoice
A Center City real estate agent has pleaded guilty to charges that he misled investors to obtain more than $3 million in loans for renovation projects that didn’t exist and instead used the money to gamble on sports and cover other personal expenses, federal prosecutors said.
Jonathan Barach, 46, was charged in August with wire fraud and other offenses stemming from the loan scheme that targeted individuals and businesses.
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Barach, who co-founded and served as the principal agent for the Barach Group, allegedly solicited loans for short-term financing opportunities meant to support builders and contractors on projects that ranged from flipping distressed properties to completing full renovations.
Between July 2017 and April 2021, prosecutors said Barach raised more than $3 million from lenders by misrepresenting how the money would be used. When seeking loans, the projects Barach referenced were not legitimate and Barach knew the money would be spent to pay off debts and make other purchases.
Barach allegedly withdrew loan funds in cash and moved large sums to accounts he held with casinos and sportsbooks. He also moved money into personal bank accounts and spent some of the loan money on jewelry and tickets to sporting events, prosecutors said.
Barach co-founded the Barach Group in 2011 and provided traditional real estate services that his website — since taken down — said totaled more than $300 million in transactions, the Inquirer reported at the time charges were filed. Prosecutors said Barach also created a second company, TBG Real Estate LLC in Philadelphia, to solicit and raise money for non-existent projects.
Barach has paid back some of his earlier lenders using loans obtained from later lenders, but he still owes about $1.4 million in fraudulently obtained loans, prosecutors said.
Barach is scheduled to be sentenced Feb. 2 and faces a maximum possible sentence of 30 years in prison.
