Des Plaines man pleads guilty in Ponzi scheme

A Des Plaines man has admitted his role in what federal prosecutors claim was a Ponzi scheme that bilked 300 people out of a collective $40 million.

Amjed Mahmood pleaded guilty on Monday to conspiracy to commit wire fraud, mail fraud and bank fraud. He is facing a maximum sentence of five years in prison and a fine of up to $250,000, according to court records.

Prosecutors said Mahmood was a partner in a Chicago-based real estate development company with two other men — Salman Ibrahim and Mohammad Zahid — between 2001 and 2008. The men recruited investors with promises of 15 to 30 percent returns on investments, but really just paid out so-called profits to early investors with money from new investors, the court papers stated.

Investors believed they were putting their money toward high-rise development projects in the city, but prosecutors say the men spent investor funds on a motorcycle parts manufacturing company in Pakistan, a gas station in La Grange and a medical equipment sales company. As part of his plea deal Mahmood received in exchange for the dropping of several charges, he admitted he used investor funds to help pay for a mortgage on his condo in Des Plaines.

The plea deal also requires Mahmood to cooperate with prosecutors against his co-conspirators, who remain at large, according to federal officials.

His next court date is slated for June 15, but that is only a status update to determine how well he is cooperating with the government, officials said. His sentencing has not been scheduled yet.

The Associated Press contributed to this report.