Eric Malley

In January 2021, federal prosecutors say the former CEO of a New York real estate firm defrauded hundreds of investors out of more than $50 million after luring them in with a strategy involving “debt-free” Manhattan properties. In December 2021 Eric Malley was sentenced by US District Judge Edgardo Ramos to 60 months in prison in connection with a securities fraud scheme in which he fraudulently induced hundreds of individuals to invest a total of approximately $58 million in two real estate investment funds. Malley pled guilty before Judge Ramos on May 20, 2021. Prosecutors alleged that Malley lied to investors about his past experience, claiming that he had already established two successful funds. Malley stepped down from his role as CEO of MG Capital in December 2019. Prosecutors say that in early 2020, Malley had become aware of an investigation by the U.S. Securities and Exchange Commission. He then deleted about 10,000 files from MG’s server, including information about brokers and closing documents detailing the costs associated with acquisition of properties, according to the complaint. In addition to the DOJ charges, Malley and his former company, MG Capital Management, are facing civil fraud charges from the SEC.