Former CEO Of Real Estate Private Equity Investment Firm Charged With Securities Fraud – Department of Justice

Audrey Strauss, the Acting United States Attorney for the Southern District of New York, and William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced today the arrest of ERIC MALLEY, the founder and former chief executive officer of real estate private equity investment firm MG Capital Management L.P.  on charges of securities fraud and wire fraud for his role in a scheme to fraudulently induce hundreds of individuals to invest a total of more than $50 million in two real estate investment funds by, among other things, lying about his own prior experience and investment track record and about the nature and characteristics of those funds.  MALLEY was arrested this morning in New Canaan, Connecticut, on a criminal complaint (the “Complaint”) and will be presented before a magistrate judge in the Southern District of New York. 

Acting Manhattan U.S. Attorney Audrey Strauss said:  “Eric Malley allegedly promised his clients that they would reap the benefits of owning equity in Manhattan real estate through his time-tested, sophisticated, debt-free investment strategy.  As alleged, those promises were lies.  Malley lied about his prior funds’ existence and performance, and he lied in promising clients that the funds were free of debt and leased to prominent corporate tenants.  While his investors lost money, Malley enriched himself.  We will continue to work with our law enforcement partners to protect investors from these types of deceptive practices.”

FBI Assistant Director William F. Sweeney Jr. said:  “As