NEWARK, N.J. (AP) -- Federal prosecutors say a northern New Jersey man has admitted orchestrating a real estate investment Ponzi scheme that took in more than $50 million from 200 victims.
David Connolly of Watchung pleaded guilty Monday to securities fraud and money laundering counts. He faces up to 30 years in prison when he's sentenced June 4 and will forfeit nearly $10 million.
Prosecutors say the 51-year-old Connolly told victims their money would be used to buy specific properties that would generate rental income returned in monthly distributions.
The investment properties lost money, but Connolly continued to tell investors they were performing well. He hid his fraud by taking money provided for specific real estate transactions and secretly using it for other purposes.
The scheme collapsed when Connolly defaulted on some mortgage payments.