Inside the Daniel Patrick Moynihan federal courthouse in Manhattan on Thursday, a chief financial officer from a Chicago-area real estate developer told jurors that his company paid appraisal fees tied to two Florida men and never saw a loan in return. That testimony is now a centerpiece of a federal trial that prosecutors say stems from a yearslong advance-fee scheme that allegedly soaked hundreds of borrowers for roughly $12 million. The two defendants are identified in court records as Joseph Malvasio and Gregg Marcus.
Chicago borrower says it wired fees, got nothing back
The CFO recounted how the firm had been looking for a hard-money lender when it was steered to a website touting a Winston-Salem development that, according to prosecutors, did not exist. As reported by Inner City Press, the witness said the company wired appraisal fees to entities tied to the defendants and ultimately received nothing of value for the money.
Prosecutors sketch out the federal indictment
According to federal prosecutors, Malvasio and Marcus ran the alleged fraud through Global Capital Partners Fund LLC from about March 2017 through August 2023, collecting various upfront charges labeled "letter of intent," "commitment" and "appraisal" fees and then refusing to refund them. A press release from the U.S. Attorney's Office in the Southern District of New York states that the scheme defrauded hundreds of victims of at least approximately $12 million and that the defendants used victim funds to pay for luxury cars and yachts.
Bogus projects, slick websites and unusual pitches
Jurors were told that the defendants' marketing materials and website pointed to projects that did not exist and to other eyebrow-raising investment opportunities. Prosecutors and witnesses said the pitches even invoked a Utah gold mine and financing for a major motion picture. Reporting by Inner City Press notes that the Winston-Salem listing was one of the selling points that persuaded representatives of the Chicago firm to send in their fees.
Feds say it was no ordinary hard-money dispute
Prosecutors told jurors they are not looking at a simple fight over a soured loan deal, but at what they describe as an advance-fee racket. In their telling, borrowers paid multiple upfront charges while the defendants created a series of "roadblocks" that caused deals to collapse before any loans were actually funded. As Law360 reported, the government says the businesses were set up to resemble hard-money commercial lenders but were structured around collecting fees and then stalling transactions.
Charges, judge and case status
Malvasio and Marcus each face one count of wire fraud and one count of conspiracy to commit wire fraud, charges that carry maximum penalties of 20 years apiece. Court records list the case as USA v. Malvasio, et al., 23-cr-396, assigned to U.S. District Judge Jesse M. Furman, according to documents cited by Leagle.
What comes next in the trial
Prosecutors are expected to call more witnesses to walk jurors through the flow of fee payments and to detail how the defendants allegedly moved money into personal accounts. As Law360 noted, the government's theory leans on a repeating pattern: upfront fees paid in full, followed by delays and dead ends that left would-be borrowers without the financing they say they were promised.
