Real Estate Scam: Dallas Man Charged with Defrauding Chinese Investors of $26 Million
A 59-year-old man, Timothy Lynch Barton, has been charged with allegedly scamming Chinese investors out of more than $26 million in a real estate scheme. According to the U.S. Attorney for the Northern District of Texas, Chad E. Meacham, Barton has been indicted on seven counts of wire fraud, one count of conspiracy to commit wire fraud, and one count of securities fraud.
The Scheme
Barton, the president of real estate development firm JMJ and CEO of real estate investment firm Carnegie Development, allegedly traveled to Hangzhou, China to pitch so-called real estate investment opportunities in Texas to Chinese investors. His presentations included his supposed ties to U.S. politicians, as well as a builder, identified in documents as "S.W.", allegedly builder Steve Wall, whom he claimed would purchase the lots to build on and then sell to buyers.
The Properties
The properties were supposedly located in sought-after neighborhoods in Dallas Fort Worth. In reality, they consisted of hundreds of acres in Kaufman, Tarrant, Johnson, and Parker counties, and the cost was inflated by as much as 195 percent. In some instances, the properties were never actually purchased.
The Investment Structure
Investors were expected to contribute 80 percent of the funds necessary for the project. Barton said that he and others would contribute the remaining 20 percent, and claimed he wouldn’t be taking a commission. The payout consisted of annual interest payments for two years, followed by the return of their initial investment at the end of the second year.
The Pyramid Scheme
For interest payments, Barton allegedly deployed the pyramid scheme routine, making interest payments to early investors with investor funds from later projects. Despite his claim that no commission would be drawn, Barton allegedly drew commissions out of investors’ funds. He also funneled money into unrelated projects; used it to pay consultants; and even paid an unrelated AmEx bill.
The Investigation and Charges
The Federal Bureau of Investigation’s Dallas Field Office conducted the investigation. Assistant U.S. Attorney Renee Hunter is prosecuting the case. Barton made his initial appearance before U.S. Magistrate Judge David L. Horan on September 26; he was arrested on September 20. If convicted, Barton faces up to 20 years in federal prison for each count of wire fraud, up to 20 years in federal prison for conspiracy to commit wire fraud, and up to 20 years in federal prison for securities fraud.
FAQs
Q: What is the alleged real estate scheme?
A: Timothy Lynch Barton allegedly scammed Chinese investors out of more than $26 million in a real estate scheme.
Q: What are the charges against Barton?
A: Barton has been indicted on seven counts of wire fraud, one count of conspiracy to commit wire fraud, and one count of securities fraud.
Q: What is the alleged purpose of the scheme?
A: Barton allegedly traveled to China to pitch real estate investment opportunities in Texas to Chinese investors.
Q: What is the payout structure?
A: The payout consisted of annual interest payments for two years, followed by the return of their initial investment at the end of the second year.
Q: What is the alleged pyramid scheme routine?
A: Barton allegedly used investor funds from later projects to make interest payments to early investors.
Q: What is the current status of the case?
A: Barton has been charged, and the case is ongoing.
Q: What is the potential punishment for Barton?
A: Barton faces up to 20 years in federal prison for each count of wire fraud, up to 20 years in federal prison for conspiracy to commit wire fraud, and up to 20 years in federal prison for securities fraud.
