Dozens of real estate entities and properties connected to a Dallas-based developer facing fraud charges have been ordered by a federal judge to be placed into receivership, according to a new report.
U.S. District Judge Brantley Starr has identified 54 entities connected to Timothy Lynch-Burton, president of development company JMJ and CEO of real estate investment company Carnegie Development, CoStar reports. has been placed in receivership.
Mr. Barton was indicted in September 2022 on seven counts of wire fraud, one count of conspiracy to commit wire fraud, and one count of securities fraud, to which he pleaded not guilty.
According to the indictment, Mr. Barton traveled to China and persuaded investors to spend millions of dollars on residential land in what Mr. Barton said was a popular area of Dallas-Fort Worth, inflating costs by 195%. That's what it means. In some cases, he may not have actually purchased the property, according to the U.S. Attorney's Office for the Northern District of Texas.
Barton told investors he partnered with builder Stephen T. Wall and Chinese businessman Michael Hu to purchase the property for eventual development. The Securities and Exchange Commission also indicted Mr. Burton, Mr. Wall, and Mr. Hu in civil court. All three have been charged with violating anti-fraud regulations. According to CoStar, Fu has pleaded guilty for his role.
Chinese investors will be promised two years of interest payments, after which their initial investment will be returned at the end of the second year, according to a news release. Burton allegedly paid interest to early investors on funds invested in subsequent projects, paid fees from investors' funds, and funneled investors' funds into unrelated projects.
Investors lost more than $26 million in the scheme, according to the indictment.
Burton “misappropriated nearly all of his investors' funds, purchasing properties in the names of other entities he controlled, paying undisclosed fees and commissions to Hu, and investing in unrelated real estate development projects,” among other things. '' to pay expenses related to him and to finance his living,'' Starr wrote in a memorandum supporting the receivership, KoStar reported.
Starr also ordered the sale of three Dallas-area properties owned by the estate, according to the newspaper. This includes Amerigold Suites, a 69-unit extended stay lodging facility located at 13636 Goldmark Drive in North Dallas. Frisco Gate Properties, approximately 4.5 acres located at the corner of the Dallas North Tollway and John Hickman Parkway in Frisco. and a 3,840 SF single-family home near Uptown.
Starr's memorandum states that Starr has appointed a trustee to oversee the property, which “continues to be subject to liens, litigation, and foreclosures that threaten to further reduce property values,” KoStar reported. Ta.
“The court is also concerned about the real risk that Mr. Barton will conceal or misplace assets if placed in receivership,” Starr wrote, noting that investor funds could be used to make mortgage payments. , he added, is used for educational expenses, personal credit cards, and mortgage purchases. According to CoStar, the plane.
In June, Burton lost control of the property at 2999 Turtle Creek Blvd. In Dallas, he once planned to turn it into a $395 million luxury hotel and condominium tower. A federal court approved a settlement that transferred ownership to the lender.
The charges against Barton carry a total maximum penalty of 180 years in prison.
