Jeffrey Egan, Troy, Michigan, pleaded guilty to bank fraud in connection with an investment fraud scheme in which over a dozen victims were defrauded of over $1 million. Egan, operated a company called Real Estate Capital Group (RECG) from 2004 through 2008. He promised investors an 11% annual interest rate for a period of two years and promised investors that their investments were fully secured with real estate.
In order to convince investors that their funds were not at risk, Egan would provide investors with written mortgages for properties that he claimed RECG had acquired with their funds. In reality, many of the mortgages were never recorded or were phony mortgages for properties in which RECG and Egan had no ownership right. Egan ultimately failed to pay the interest rates that he promised or to return the principle funds to investors when the term of their investment expired.
The defendant is scheduled to be sentenced September 6, 2012.