Real Estate Man Charged in Ponzi Scheme

Real estate news By HARRY R. WEBER AP Business Writer
March 8, 2007, 4:38PM

ATLANTA — A real estate promoter was charged in a federal indictment unsealed Thursday with stealing tens of millions of dollars from investors in a Ponzi scheme and using the money to pay for jewelry, luxury automobiles, and credit card and tax bills.

Gene A. O'Neal, 36, of Atlanta entered a not guilty plea at a hearing in federal court in Atlanta, said Patrick Crosby, a spokesman for the U.S. attorney's office.Bond was set at $50,000, but O'Neal was expected to post that and be released, Crosby said. The criminal indictment follows a civil complaint related to the scheme filed by the Securities and Exchange Commission last October against O'Neal and the firm he ran, Pinnacle Development Partners LLC. A federal judge issued a preliminary injunction and appointed a receiver, who has taken charge of the business and assets of Pinnacle Development Partners.

The indictment, dated Tuesday, said the firm and O'Neal raised about $69 million from some 2,000 investors throughout the U.S. and several foreign countries, ostensibly for the purchase of distressed, foreclosed or bank-owned real estate that would be sold at a promised return of 25 percent within 45 or 60 days. Instead, the indictment said, O'Neal used newer investors' contributions to pay back money owed to older investors, racking up huge debts along the way.

Send tips or a Letter to the Editor to editor@estategateway.com