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Mitchell Klein, 62, has been sentenced to three years in federal prison and must pay the restitution for not reporting a theft from his real estate company, which was connected to the scheme involving his investors, family and friends.
In total, more than 100 clients lost investments with Klein and his former business partners, who in total lost more than $60 million in real estate projects and ventures.
According to a lohud report, at sentencing, Klein was faced by his victims and “broke down emotionally” as he apologized to them for losing “a considerable amount of money.”
In March, Klein pleaded guilty to failing to report a felony crime to federal authorities and to concealing a $500,000 theft from one of his partners. Neither of his partners are facing charges in relation to this case. Their real estate investment company went into bankruptcy in 2010, less than six years after it was formed.
From October 2009 through February 2010, Klein concealed information that one of his business partners cashed a $500,000 cashier's check for his own personal use, rather than deposit the money into the investment fund. Klein never disclosed the information to investigators.
It was initially suggested that Klein serve just 12 to 15 months in prison, but Judge Kevin Karas determined a 36-month sentence to be more appropriate. Klein has been remanded into custody. He will also have one year of supervised released upon the completion of his sentence.
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