Avram “Avi” Lebor had a deal that sounded too good to be true.
Working out of his MKD Capital Corp. office in New York City, Lebor promised over a two year period to obtain at least $2.5 billion in loans for nearly 50 real estate development projects around the country.
And even better, the advance fees borrowers paid for processing and securing the loans were “fully refundable,” according to MKD’s pitch.
But federal prosecutors in New York say Lebor’s pitch was too good to be true. None of the loans were ever secured, and approximately $9 million in those “fully refundable” loan application deposits, as well as $500,000 in legal retainer fees, were kept by Lebor and MKD, according to James B. Comey, U.S. Attorney for the Southern District of New York.
From 1998 to May 2002, “Lebor and his co-conspirators participated in a massive scheme to defraud developers seeking to obtain financing for development projects,” Comey said in a statement.
Lebor, president of MKD Capital, has plead guilty to federal charges of wire fraud and conspiracy charges “arising from his scheme to defraud loan applicants of millions of dollars in advance fees,” according to the statement from Comey’s office.
Lebor, 55, of Lawrence, N.Y., faces a maximum five-year prison sentence a $250,000 fine on each count. He is scheduled to appear in U.S. District Court in New York on Feb. 5.
The phone has MKD’s Manhattan office is no longer working and attempts to reach Lebor were unsuccessful.
In his guilty plea, Lebor admitted he accepted advance fees from individuals in return for obtaining financing for real estate development projects, and that he and others at his direction lied to developers to collect the fees, Comey said.
According to Comey’s statement, Lebor defrauded developers by falsely representing that MKD Capital had access to funds; lying when he said he could get loans; and inducing developers to pay “millions” in advance fees, including application fees and legal retainers.
The FBI assisted in the case, Coney said.
Lebor has also had legal problems elsewhere.
Court records show that in December of 2000, he settled a breech contract filed against him in the U.S. District Court in the Eastern District of California by paying $150,000 to the plaintiff.
Lebor has also been the target of lawsuits, complaints, and investigations in Florida, Colorado, Ohio and Massachusetts, according to various published reports.
“I lost my life savings,” an unidentified Denver businessman told the Orlando Business Journal in May. “We are a group of businessmen who knew nothing about developing, but had this prime piece of property we wanted to do something with. The bottom line is that we not only gave (MKD) money, but we personally invested a lot of money in the project.”
