Point Breeze man sentenced to 33 months in prison for international Ponzi scheme
A Point Breeze man who stole at least $1.4 million from foreign investors in a Ponzi scheme will spend 33 months in prison, a federal judge ruled Thursday.
Golan M. Barak, 50, pleaded guilty in May to one count of wire fraud. U.S. District Judge Donetta Ambrose also sentenced him to three years of probation. She scheduled a restitution hearing for Jan. 4.
Luring foreign nationals, particularly from Israel, to Pittsburgh, Barak would take them on a tour of properties that he claimed would generate rental income or could be renovated and flipped for a profit, prosecutors said.
Instead of using their money to buy the properties, he pocketed most of it, prosecutors said.
In a Ponzi scheme, the person committing the fraud uses money from new victims to make payments to earlier victims to convince them their investments are yielding returns.
Barak did that and also used some of the later victims' money to buy properties he was already supposed to have purchased so he could deed them over to earlier victims, prosecutors said.