United States of America v. Carl Chen

Wilmington, DE - Delaware Businessman Sentenced to Federal Prison In Multi-Million Dollar Ponzi Scheme



Carl Chen, owner of Chenmax Properties, Inc., a Delaware Real Estate Investment Trust, and part-owner of Re/Max Sunvest Realty Co., was sentenced today in federal court in Delaware to 51 months in prison. Chen pled guilty in March 2019 to wire fraud emanating out of a multi-year Ponzi scheme he orchestrated.



According to court documents and statements made at the hearing, Chen operated Chenmax Properties since 1997, soliciting large real estate investments from his real-estate clients and others. Chen promised his investors guaranteed interest and a full return of their principal payments. However, by 2013, Chen’s business was losing money, and Chen began diverting newly invested funds to pay prior investors.



The government calculated that Chen fraudulently collected at least $3.32 million in investments from twenty different victims between 2013 and 2017. In October 2017, Chen declared bankruptcy in the United States Bankruptcy Court for the District of Delaware, seeking to discharge $6.738 million of debt he owed to investors, including the victims of his fraud.



United States District Judge Richard G. Andrews, who sentenced Chen, noted that the case was “One of the most horrendous white collar offenses that I remember seeing.”



Victims at the sentencing hearing described how Chen solicited hundreds of thousands of dollars in investments from them on multiple occasions, claiming that the investments were for real estate ventures. In actuality, the money investors paid Chen was immediately used to pay off other investors or for Chen’s personal expenses.



U.S. Attorney Weiss commented that “Chen brazenly defrauded innocent Delaware residents, and others, who believed his promises and trusted him to handle their financial security. While this sentence cannot repair the breach of trust, it sends a strong message that my office will prosecute these fraud crimes and seek substantial prison terms for anyone who, like Chen, carries out a large-scale fraud against unsuspecting victims.”



"The effects of this type of fraud can be devastating to the victims. As a result of this scheme, several hardworking people were victimized and lost significant amounts of their life savings," said Jennifer Boone, Special Agent in Charge of the FBI Baltimore Office. "The FBI in Delaware and our partners will continue to vigorously investigate these crimes and hold accountable anyone who takes advantage of unsuspecting victims in order to enrich themselves."



This case was investigated by the FBI Baltimore Division’s Wilmington Office.

Charge:

Wire fraud in violation of 18 U.S.C. 1343.

DEFENDANT WAS SENTENCED TO 51 MONTHS IMPRISONMENT; 3 YEARS SUPERVISED RELEASE; FINE WAIVED; $100 SPECIAL ASSESSMENT; RESTITUTION IN THE AMOUNT OF $3,330,000.00