Charges Filed for $20M Loan Fraud Scam

Allison Tussey —  May 31, 2013 — Leave a comment

Timothy D. Burns, 33, Phoenixville, Pennsylvania, was charged by Information in a $20 million fraud scheme that involved mail fraud, wire fraud and loan fraud.

Defendant Burns was the sole owner of ESG Family Services, among other businesses. ESG Family Services provided billing paying and other personal services to clients. To facilitate his work and, as it developed, his alleged fraud, defendant Burns induced many of his Family Services clients to add him as a signatory to their bank accounts. He also allegedly represented to clients and others that he could acquire shares of Facebook and other social media stock before their public offerings at favorable prices.

According to the information, between at least May 2007 and September 2012, Burns converted money entrusted to him by more than 50 clients and would be investors for his personal gain. In 2011, without their knowledge or consent, Burns allegedly used his clients’ and investors’ money to buy a shore home in Avalon, New Jersey for more than $4 million and to make a down payment on a commercial office building in Conshohocken, Pennsylvania. In 2012, he allegedly misrepresented to a bank that he had acquired stock, when he had not, to obtain a $6 million mortgage loan on the commercial office building. It is further alleged that he used the fraudulently acquired shore home as collateral on a second loan of $1.5 million issued to him by the same bank to buy the office building.

If convicted of all charges, Burns faces an advisory sentencing guideline range of between 151 and 188 months in prison, a $2.5 million fine, a five-year term of supervised release, a $400 special assessment and restitution of just under $20 million. In addition, the defendant is liable in forfeiture in the same amount.

United States Attorney Zane David Memeger announced the charges.

The case was investigated by the Federal Bureau of Investigation and the United States Postal Inspection Service. It is being prosecuted by Assistant United States Attorney Pamela Foa.

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Allison Tussey

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