AG in Missouri indicts man for Real Estate Ponzi Fraud

Attorney General for the Eastern District of Missouri, Michael Reap in a press release announced the indictment of Aaron Duncan, the Chief Executive Officer and Owner of The Duncan Group, for mail and wire fraud and money laundering.

The indictment states that Duncan back in December of 2005 owned and operated several businesses that operated under the umbrella name of The Duncan Group. The Duncan Group had offices in St. Charles and Chesterfield Missouri.  It states that Duncan himself was experiencing personal financial difficulties however The Duncan Group was presented as a successful business company. The Duncan Group did business as a buyer, rehabilitator and seller of real estate in Missouri. The activities of the company included foreclosed properties that also where supposedly purchased for rental properties and included commercial real estate as well.

The indictment further charges that between 2006 and October of 2008 Duncan solicited individual investors to invest in real estate ventures with The Duncan Group. It states that Duncan used a ponzi style scheme where investors were paid with other investors principal rather than on legitimate returns from the sale of real estate. Duncan would routinely recruit new investors to cover existing investor investments to create the false appearance that the company was doing well.

Duncan prepared fraudulent presentations that presented high rates of returns for investors in order to convince them that their investments were profitable. Duncan told investors that their investments were covered by deeds to real estate properties. Duncan failed to disclose that The Duncan Group had not purchased enough properties to produce such returns and that the interest payments they were receiving came from the capital of new investors.

Duncan was also using investors’ funds to make the payments on his personal property and his personal expenses. Funds that should have been ear marked for the purchase of additional real estate. The scheme came caused investors to lose over two million five hundred thousand dollars.  The majority of the investors in Duncan’s scheme lost all of their investment.

The investigators into this scheme warn that investors should be wary about unusually high rates of return claims when investing. They further warn that investors should check out the investment company and ask for a second opinion from other investment companies in the area. One good rule of thumb would be to check the states web site for how long the company has been in business and when you receive statements from your investment company be sure to check them for inconsistencies.

The Federal Bureau of Investigation states that they will continue to investigate individuals who knowingly empty the pockets of unsuspecting investors. White collar crimes continue to be their top priority and they continue to partner with State and Local law enforcement to protect and prosecute the scam artists who prey on investors and the American public.

Duncan for this action is facing four felony counts of wire fraud, seven counts of mail fraud and nine felony counts of money laundering.  The counts carry a maximum penalty of twenty years in prison for each count of mail and wire fraud and ten years for each count of money laundering. He can receive fines of two hundred fifty thousand dollars for each count.

Reap thanked the task force involved for their help in bring Duncan scheme to light. The task force consisted of The Internal Revenue Service-Criminal Investigation, The Postal Inspection Service, The Federal Bureau of Investigation, The Securities Division of the Missouri Secretary of State, and The United States Attorney’s Office.

Reap affirmed that charges in an indictment are merely accusations and that the defendant is presumed innocent until proven guilty in a court of law.