Two Illinois Men Indicted in Ponzi Scheme

A federal indictment has been returned accusing Marcin Malarz, 39, and Arthur Lin, 48, of operating a Ponzi scheme.  The two men are accused of fraudulently raising over $9 million from 25 real estate investors and using the funds for their own personal use and to pay off earlier investors.

According to the indictment, Lin, of Palatine, was an officer of Malarz Equity Investments LLC, which bought various apartment buildings and converted the units into condominiums.  Between November 2005 and April 2010, Lin recruited clients to invest in Malarz Equity.  In some instances, the clients were encouraged to obtain home equity loans or liquidate their brokerage investments to obtain the capital used to make the investments.  Lin and Malarz are also accused of making false representations about how the funds would be used, the solvency of the business, and Malarz’s ability to personally guarantee the investments.

Malarz allegedly spent $2 million of the funds on personal expenses including a new Mercedes.  The remaining investor funds were paid directly to Lin’s wife.

The indictment is seeking $5.5 million, which is the estimated total loss to investors, and Lin’s homes in Palatine and Barrington.  His arraignment date has not been determined at this time.

According to the Justice Department, Malarz is a fugitive and believed to be currently living in Poland.

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