Dallas man allegedly scammed $26M from Chinese real estate investors
A Dallas-area man has been charged for allegedly scamming Chinese investors out of more than $26 million in a real estate scheme.
According to a release from U.S. Attorney for the Northern District of Texas Chad E. Meacham, Timothy Lynch Barton, the 59-year-old president of real estate development firm JMJ and CEO of real estate investment firm Carnegie Development, has been indicted on seven counts of wire fraud, one count of conspiracy to commit wire fraud, and one count of securities fraud.
Barton made his initial appearance before U.S. Magistrate Judge David L. Horan on September 26; he was arrested on September 20.
If convicted, Barton faces up to 20 years in federal prison for each count of wire fraud, up to 20 years in federal prison for conspiracy to commit wire fraud, and up to 20 years in federal prison for securities fraud.
He is also the subject of a parallel civil action filed by the U.S. Securities and Exchange Commission.
According to the indictment, Barton allegedly traveled to Hangzhou, China to pitch so-called real estate investment opportunities in Texas to Chinese investors.
His presentations included his supposed ties to U.S. politicians, as well as a builder, identified in documents as "S.W.", allegedly builder Steve Wall, whom he claimed would purchase the lots to build on and then sell to buyers. (You can get a glimpse of the hypnotic spell Barton surely wove, with his blue pinstripe suit, in this video posted by the DBJ.)
The properties were supposedly located in sought-after neighborhoods in Dallas Fort Worth. In reality, they consisted of hundreds of acres in Kaufman, Tarrant, Johnson, and Parker counties, and the cost was inflated by as much as 195 percent. In some instances, the properties were never actually purchased.
Investors were expected to contribute 80 percent of the funds necessary for the project. Barton said that he and others would contribute the remaining 20 percent, and claimed he wouldn't be taking a commission.
The payout consisted of annual interest payments for two years, followed by the return of their initial investment at the end of the second year.
For interest payments, Barton allegedly deployed the pyramid scheme routine, making interest payments to early investors with investor funds from later projects.
Despite his claim that no commission would be drawn, Barton allegedly drew commissions out of investors’ funds.
He also funneled money into unrelated projects; used it to pay consultants; and even paid an unrelated AmEx bill.
In 2020, several Chinese investors tried to force JMJ, Barton's company, into Chapter 7 bankruptcy, which would have led to its liquidation and the investors possibly getting some money back. But in early September 2022, JMJ filed for Chapter 11, allowing the company to continue operations without liquidating their assets.
The Federal Bureau of Investigation’s Dallas Field Office conducted the investigation. Assistant U.S. Attorney Renee Hunter is prosecuting the case.