ST. LOUIS (CN) - The former CEO and owner of The Duncan Group pleaded guilty to federal fraud charges in a $3.9 million Ponzi scheme. Aaron Duncan, 33, of Defiance, Mo., pleaded guilty to two federal felonies: mail fraud and money laundering.
Under his leadership, The Duncan Group was involved in flipping residential real estate. But prosecutors say Duncan falsely promised investors about the security of their investments and rates of return.
The investors who were repaid on their principal were paid from new money from other investors, not from returns from the real estate projects themselves, court papers state.
The scheme ran from January 2006 to October 2008, when Duncan told investors he would declare bankruptcy. The scheme involved 50 investors and Duncan bought only 10 properties, which lost money, court papers state.
Mail fraud is punishable by up to 20 years in prison and a $250,000 fine, money laundering by up to 10 years and a $250,000 fine.
Duncan's sentencing is set for July 27.
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