Philly Broker Sentenced for $3M Fake Loan Scheme

A Philadelphia real estate agent is likely breathing a sigh of relief after being sentenced in a multimillion-dollar con for far less than the possible maximum.

On Wednesday, Jonathan Barach received a 37-month prison sentence for orchestrating a fraudulent loan scheme, the U.S. Attorney’s Office announced. The prison stint will be followed by two years of supervised release. He was also ordered to pay $1.5 million each in forfeiture judgments and victim restitution, as well as an additional $200 restitution penalty.

Barach pleaded guilty in September to one count of wire fraud and one count of making an illegal monetary transaction. He faced up to 30 years in prison.

Barach co-founded the Barach Group, a residential team based in Philadelphia’s Center City, and launched a second company, TBG Real Estate. While he offered traditional services, Barach also spent nearly four years using the companies to fraudulently solicit $3.1 million from individuals and businesses for non-existent short-term real estate investments, according to prosecutors.

Barach made false statements on how raised funds would go towards bridge loans to builders and contractors looking to make flips or renovations. In reality, not a single dollar raised went towards real estate projects.

Instead, the fraudster often transferred the funds to his own coffers, using the money to buy a 4.7 carat diamond ring for more than $46,000, designer clothing from Louis Vuitton and expensive front row seats at sporting events. He also deposited five- and six-figure sums at sportsbooks and casinos.

Barach’s victims included those he had personal relationships with. Funds were siphoned from retirement accounts, children’s education funds and people’s life savings. A few early lenders were repaid with funds raised from later victims, but nearly $1.5 million in loan proceeds remain outstanding.

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

The Barach Group claims to have closed more than $300 million in transactions since 2011. The firm no longer appears active.