A Center City real estate agent who defrauded investors of $1.5 million was sentenced to 3½ years in prison

A Center City real estate agent was sentenced Wednesday to 3½ years in prison for defrauding investors of about $1.5 million — money he said would be put toward promising development projects, but that he instead used to buy jewelry, luxury clothing, and fund a long-running gambling habit.

Jonathan Barach said he harbored deep regret for his conduct, saying it was a “departure from who I am in my core,” and that his gambling addiction had fueled a series of choices that put him into a deep financial tailspin.

“I’m ashamed of my actions in that period of my life,” he said.

But prosecutors called Barach — a cofounder and onetime principal agent of the Barach Group — a “conman,” saying he’d spun a “constant web of lies” to deceive his victims and fund a lifestyle he hadn’t earned.

U.S. District Judge Mia R. Perez said she was struck by the notion that Barach, 47, largely deceived people he knew — and that he continued to mislead them with a “sophisticated” long-running scheme.

“That wasn’t done in a moment of haste, or a moment of bad judgement, or a moment where your character failed you,” Perez said, later adding: “You were trusted. You violated that trust.”

In addition to a prison term totaling 37 months, Perez said Barach would serve two years on supervised release, pay restitution of nearly $1.5 million, and not be permitted to gamble.

The U.S. Attorney’s Office charged Barach last summer with crimes of wire fraud and making an illegal monetary transaction. Between 2017 and 2021, prosecutors said, Barach raised about $3 million from investors, saying the money would be put toward short-term real estate financing opportunities that would deliver lucrative returns.

“In truth,” prosecutors said, “there were no real estate projects, no financing opportunities existed, and Barach knew the newly raised capital would be used for his own purposes and debts.

“Not a single dollar,” they added, “was invested in real estate.”

One way the money was used, prosecutors said, was to fund Barach’s gambling habit, which saw him regularly make big bets or five- and six-figure deposits at casinos and sportsbooks.

He also spent nearly $50,000 on a 4.74-carat diamond engagement ring, prosecutors said, and bought Louis Vuitton boots and high-priced tickets to sporting events.

Barach’s attorneys acknowledged in court documents that his judgment had been hampered by a “crippling and all-encompassing gambling addiction.” During the depths of that addiction, his lawyers said, he would make $500 to $1,000 bets on sports contests, then “chase” his losses by placing new bets he thought would win.

Barach always intended to pay his investors back, his lawyers wrote, and he did repay about half of the $3 million he raised.

But prosecutors said he did so “in large part” by using new investor funds to repay his original benefactors, describing that in court documents as “a hallmark of a traditional Ponzi scheme.”

Barach’s lawyers said the “financial chaos” in his life became so severe that he at one point took out loans from Par Funding — the now-defunct Philadelphia-based lending company that was later exposed as a massive Ponzi scheme operated by principals who acted like loan sharks.

The pressure from having to pay Par Funding back compounded the issues created by his gambling habit, his lawyers wrote in court documents, and he went on to seek money from anyone he could.

Barach said in court Wednesday that he “truly believed” he could win enough money through gambling to pay his investors back.

“I overextended myself financially,” he said.

Six victims who testified Wednesday said Barach gave them no indication that he would misuse their money. He was smooth, charming, and reassuring, they said, but after receiving their money, he grew distant or created excuses for why their funds were no longer available.

His fraud cost them opportunities to pay for homes, their children’s tuition, and wrecked their life savings, they said.

“Not at one point in time were you ever honest with me,” said one victim, Gregory Heard. “Not once.”

Assistant U.S. Attorney Terri A. Marinari said Barach “charmed his way into the purses and pockets of friends and clients and other associates.”

“He just stole their money — flat out,” Marinari said.

One of Barach’s attorneys, William M. McSwain, disputed that, characterizing the money Barach raised as a series of loans he intended to pay back, and calling his conduct in this case an “aberration.”

Perez, the judge, said Barach deceived his friends and associates in ways that significantly harmed their lives.

“There’s the personal angle,” she said, “the breaking of trust with friends and people who relied on you.”