Bar Works Ponzi schemer sentenced to prison
Co-founder Savraj Gata-Aura lured hundreds of victims to invest $40M in fraudulent co-working company, federal prosecutors said
The first prison sentence has been handed down in connection with the Bar Works co-working Ponzi scheme, with more set to come later this year.
British national Savraj Gata-Aura was sentenced to 4 years in federal prison on Tuesday for his involvement in the scheme. The United States Attorney’s Office for the Southern District of New York made the announcement, Crain’s reported.
Gata-Aura lured hundreds of victims “to invest approximately $40 million into a massive Ponzi scheme,” acting U.S. Attorney Audrey Strauss said in a statement. Strauss said Gata-Aura also concealed from investors that Bar Works was run by Renwick Haddow, who pleaded guilty to his role in the fraud and an unrelated scheme, and is considered the mastermind of the operation. Instead of Haddow, Gata-Aura listed the fictional CEO Jonathan Black as the company head, prosecutors said.
“By the time the scheme collapsed, Gata-Aura had personally made close to $3 million from unsuspecting investors,” according to the statement.
The Real Deal first revealed Haddow’s connection to the company in January 2017, and groups of foreign investors filed several lawsuits against the firm that summer after months of missed payments.
The company sold securities tied to rental income from co-working desks at combination bar-and-office spaces across the U.S. and in Istanbul. The Ponzi schemers eventually began selling non-existent space at locations that were already full in order to maximize their profits.
Haddow, who was extradited to the U.S. from Morocco last year, has admitted to his involvement in both Bar Works and a separate Bitcoin-related scheme. His sentencing is scheduled for Oct. 23.
Another co-conspirator, James Moore, was convicted last year and allegedly received more than $1.6 million in commissions for his role in the Bar Works scheme. His sentencing date is pending.
Gata-Aura “lied, cheated, and as a result many victims were left destitute or deprived of money that was important to them,” federal court Judge Jed Rakoff said at the sentencing. “His primary motivation was greed.” [Crain’s] — Kevin Sun