Carl Chen, owner of Chenmax Properties, Inc., a Delaware Real Estate Investment Trust, and part-owner of Re/Max Sunvest Realty Co., pleaded guilty in federal court Tuesday to wire-fraud charges that were described as a Ponzi scheme.

Chen’s sentencing is scheduled in early June before U.S. DistrictCourt Judge Richard G. Andrews, United States District Judge for the District of Delaware. Chen faces a maximum penalty of 20 years in prison.

According to court documents and statements made in open court, between 2013 and 2017, Chen solicited Re/Max Sunvest Realty clients and others to invest $3.32 million,. Chen claimed the funds would be used to purchase real estate which would provide annual interest returns of 10 percent to 15 percent for the investors.

Instead, Chen diverted the money from later investors to pay off interest obligations to prior investors in what was described as a Ponzischeme in a release from the U.S. Attorney’s office for Delaware.

A court filing indicated that Chen, between March 2013 and October 2017, purchased one property with investor funds for $11,185. Chen made “lull” interest payments to investors.

In October 2017, Chen declared Chapter 7 bankruptcy in the United States Bankruptcy Court in Wilmington, seeking to discharge millions in debts he owed to investors.

Delaware U.S. District Attorney DavidWeiss stated, “The defendant callously targeted vulnerable individuals and then defrauded them out of their hard-earned savings. My office will continue to prosecute those who seek to profit by criminally exploiting others.”

“The FBI in Delaware will continue to aggressively pursue those who defraud unknowing or unsuspecting victims who place their trust in individuals who misrepresent themselves as professionals,” said FBI Baltimore Acting Special Agent in Charge Jennifer Moore. “These individuals, who prey on investors, enrich themselves and cause financial damage which may take years, if ever, for the victims to recover.”

The case was investigated by the FBI and the Office of the United States Trustee and is being prosecuted by Assistant U.S. Attorney Alexander P. Ibrahim and Special Assistant U.S. Attorney Hannah McCollum.

Chen earlier lost his real estate brokers license over actions at Sunvest that also resulted in disciplinary action for associates. (See document below)

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An earlier version of this story incorrectly reported that Chen was a member of the state Real Estate Commission.