A 39-year-old Palatine man is facing federal fraud charges stemming from a real estate scheme that prosecutors claim lost investors $5.5 million.
Arthur Lin was indicted Thursday by a federal grand jury on wire fraud charges. Also indicted was 48-year-old Marcin Malarz, formerly of Lake Forest, who authorities said was Lin's partner in the scheme.
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Lin will be arraigned in the coming days, but authorities said Malarz has fled the country and is believed to be living in Poland.
Prosecutors said that between 2005 and 2010 the pair fraudulently offered and sold investments in a real estate business that converted apartments into condominiums, oftentimes pocketing funds from investors. Prosecutors said the pair also lied about the financial condition of the company when lining up investors.
The scheme generated roughly $9 million, federal authorities said. Some of the funds were used to "make Ponzi-type payments to certain investors," but ultimately resulted in a loss of at least $5.5 million, officials said.
Prosecutors said Malarz misappropriated about $2 million to fund other business expenses, travel, mortgage payments, clothing and a Mercedes. Lin is accused of pocketing 10 percent of the funds that Lin brought in from investors.
Prosecutors are seeking forfeiture of proceeds, including Lin's house in Palatine as well as additional homes in Palatine and Barrington.
Both men face up to 20 years in prison if convicted.