A Connecticut developer was sentenced to three years in prison after pleading guilty to swindling investors.
Samuel Klein of Greenwich defrauded investors out of $1.5 million, prosecutors said. The 66-year-old will also have three years of supervised release after serving his time and has to pay restitution.
Klein collected tens to hundreds of thousands of dollars in investments from friends and associates for real estate deals, the Hartford Courant reported, but spent the money on himself and his family.
Records produced by prosecutors showed Klein spent $60,000 on chartered flights and $194,000 on getaways to the Amangani Resort in Jackson, Wyoming. Prosecutors said Klein “prioritized his own lavish lifestyle.”
Klein’s attorneys claimed the developer’s business was crippled by the 2008 financial crisis, which ravaged his two companies, Fairchild Properties and Fairchild Realty Group. The two firms were said to be worth millions of dollars and had a combined 3,200 employees. While Klein is linked to two companies with those names, The Real Deal could not independently confirm their financial history and employment numbers.
Klein reportedly developed a number of projects, including the Payton Lane Nursing Home in the Hamptons, the Danbury Hilton in Danbury and the Sofitel Philadelphia at Rittenhouse Square.
But Klein controlled other entities as well, according to the Justice Department. In 2018, he falsely told an investor that funds would go towards distressed debt, the agency said. The victim ultimately cut Klein a check for $200,000 and later put in another $50,000.
From 2016 to 2019, Klein defrauded three more investors out of more than $1.2 million by making false statements and representations, prosecutors said. Last year, Klein pleaded guilty to interstate transportation of property taken by fraud, as well as money laundering.
Klein has been freed on bond, but was taken back into custody after Tuesday’s sentencing.
[Hartford Courant] — Holden Walter-Warner
Source: The Real Deal