Michael Morawski, of Sleepy Hollow, and Frank Constant, of West Dundee
Sentenced in $18M Ponzi Scheme
Two Dundee Township men have been sentenced to prison for cheating 267
victims out of $21 million in a
real estate investment scheme. They also were ordered to pay $18 million in restitution.
According to authorities, Michael Morawski, of Sleepy Hollow, and Frank
Constant, of West Dundee, fraudulently raised $21 million in their real
estate investment company, Michael Franks LLC, over a period of about
four years. The men offered investors a choice of two investments. The
first was a three-to-five-year-long investment in specific apartment complexes
that Morawski and Constant said would render returns of between seven
and nine percent annually. The second was an investment in real estate-based
“funds” that the men said were backed by promissory notes
and offered an annual interest payment of eight to 30 percent.
When some of the company’s projects began to perform poorly, Morawski
and Constant transferred funds from other investments to hide the losses.
They also used the transferred funds for their own purposes and to pay
“returns” to early investors, without disclosing where the
money came from. Authorities said Morawski also took nearly $1 million
Morawski has been sentenced to serve 10 years in prison for his role in
the investment fraud scheme. Constant has been sentenced to seven-and-a-half
years. Their scheme was one of three such Chicago-area
Ponzi schemes to be brought to a close over the past two weeks. For additional details
or to learn about the other two
Chicago-area Ponzi schemes, click here.