Brian R. Callahan, 43, and his brother-in-law Adam J. Manson, 41, were charged in a 24-count indictment unsealed today in federal court in Central Islip, New York. They pleaded not guilty and were released on bond.
The men are accused of telling investors that their money was going into hedge funds and other investment vehicles while actually much of it was going to the unprofitable 117-unit Panoramic View Resort & Residences in Montauk.
“The defendants used one of Long Island’s landmarks, the Panoramic View Resort, to perpetrate a wide-ranging fraud,” U.S. Attorney Loretta Lynch said today in a statement about the scheme, which purportedly took place from 2006 to 2012 and involved more than 40 investors. “To conceal their status as business failures, the defendants employed all the tricks in the typical con man’s bag.”
Callahan, of Old Westbury, and Manson, of New York, were partners in Distinctive Ventures, a real estate investment firm that purchased the resort in January 2007 for about $38 million, according to the indictment. Callahan, a former securities broker who was sanctioned by regulators in 2009, was also managing a group of offshore investment funds, for which he was soliciting money from investors, the U.S. said.
