Philly Broker Admits to $3M Fake Loan Scheme

A Philadelphia real estate agent who pitched himself as a financing matchmaker for local builders has admitted he was running a multimillion-dollar con.

Jonathan Barach, 46, pleaded guilty Tuesday to wire fraud and an illegal monetary transaction tied to a scheme that raised more than $3 million from individuals and businesses under the guise of short-term real estate loans, federal prosecutors said. He faces up to 30 years in prison; his sentencing is scheduled for February.

Barach co-founded The Barach Group, a residential team based in Center City, and launched TBG Real Estate to expand his profile. According to the U.S. Attorney’s Office for the Eastern District of Pennsylvania, he told prospective lenders their cash would be used to provide bridge loans to contractors and investors flipping distressed homes or finishing rehabs.

In reality, prosecutors said, there were no projects, no financing arm and no legitimate deals. The scheme started in July 2017 and went on until April 2021.

Prosecutors also previously claimed that Barach presented prospective investors with a 16 percent annual return on investment while misleading how previous loans had been used.

Barach allegedly funneled investor money into personal accounts, spent freely and moved large sums into casino and sportsbook accounts, prosecutors said. A few early lenders were repaid with funds raised from later victims — a move akin to Ponzi schemes — but more than $1.4 million in loan proceeds remains outstanding.

Back in August, Barach’s attorney told the Philadelphia Inquirer that his client “has taken full responsibility for his actions and has his life headed in the right direction,” adding that Barach “already paid back the majority of the money at issue and is continuing to pay the lenders what they are owed.”

Barach previously worked as a sports agent, representing a handful of Philadelphia Eagles players, according to an online biography.

The Barach Group claimed to have closed more than $300 million in transactions since 2011. The website for the firm is no longer active.