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Tuesday, April 7, 2020

U.S. ATTORNEY'S OFFICE FOR THE NORTHERN DISTRICT OF ILLINOIS: Kendall County Real Estate Professional Charged with Operating $23 Million Ponzi Scheme

By Press release submission | Dec 27, 2018

Court room

U.S. Attorney's Office for the Northern District of Illinois issued the following announcement on Dec. 21.

A Kendall County real estate professional has been indicted on federal fraud charges for allegedly orchestrating a $23 million Ponzi scheme.

MICHELLE LABRA owned and operated Labra Group Realtors LLC, an Aurora-based investment program that used the promise of outsized returns to receive $23 million from at least 25 investors from 2009 to 2015, according to an indictment returned Thursday in U.S. District Court in Chicago. Instead of investing the money, Labra spent approximately $19.6 million to pay earlier investors via Ponzi-type payments, while misappropriating more than $3.3 million for her personal benefit, including expensive jewelry and vacations in Jamaica, Mexico and Guatemala, the indictment states.

The indictment charges Labra, 47, of Yorkville, with three counts of wire fraud and one count of making a false statement to the U.S. Treasury Inspector General for Tax Administration. Arraignment in federal court in Chicago has not yet been scheduled.

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation; Gabriel L. Grchan, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago; and J. Russell George, United States Treasury Inspector General for Tax Administration. The government is represented by Assistant U.S. Attorney John D. Mitchell.

According to the indictment, Labra claimed that investor funds would be used to make short-term, high-interest loans to borrowers, and that the loans would be secured by the borrowers’ residences. Labra represented that investors would receive full repayment of the principal loan amount, a service fee paid by the borrower, and at least 14% interest on the loan, the indictment states. In reality, Labra never entered into any agreements with borrowers.

Original source can be found here.

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U.S. Attorney's Office for the Northern District of Illinois