Boston, Massachusetts — Daniel J. Flynn III, 54, of Milton, was sentenced to four years in prison, three years of supervised release, and ordered to pay restitution for defrauding more than 90 victims, many of whom were friends, business associates, and sophisticated investors, of more than $21 million.
A well-known auctioneer, Flynn preyed upon friends and family, taking their hard-earned money with promises of high returns. Instead, he violated their trust and used their investments to perpetuate an elaborate Ponzi scheme, using the money for his own personal expenses, including renovations to his Milton home, according to Acting United States Attorney William D. Weinreb.
“Through sophisticated financial schemes, Mr. Flynn took advantage of a wide array of victims, cheating them out of millions of dollars,” said Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division. “This case highlights the FBI’s commitment to aggressively following the money, so that financial fraudsters like Flynn — who are motivated by greed — are brought to justice and do not take advantage of the hardworking men and women of our communities.”
Flynn, who pleaded guilty in February 2017 to nine counts of wire fraud, started a real estate fund called the DJF Real Estate Opportunity Fund (“the Fund”) with another individual around 2007. The fund touted Flynn’s experience in real estate and boasted of an extraordinary rate of return on investments.
Specifically, Flynn used the promissory notes to defraud investors by soliciting loans from investors to purchase or invest in a piece of distressed real estate. In return, Flynn gave the investor a promissory note guaranteeing the investor a 12 to 15 percent return. Although Flynn did make payments to investors, as is typical in a Ponzi scheme, the money came from other victims — not real estate investment profits. In total, Flynn defrauded about 60 individuals and entities of approximately $18.4 million.
In addition, Flynn used the Quincy apartment complex to defraud investors. In 2005, Flynn purchased the property for $995,000. Despite the fact that he already owned the property, Flynn caused the Fund to purchase the apartment complex for approximately $2.2 million. Flynn then convinced some investors to loan him money to develop the units and convinced other investors to loan him money to purchase the property — despite the fact that he already owned it — and promised a 12 to 15 percent profit in return. Flynn never repaid the investors.
Acting U.S. Attorney Weinreb and FBI SAC Shaw made the announcement today. Assistant U.S. Attorney Neil J. Gallagher Jr. of Weinreb’s Economic Crimes Unit prosecuted the case.
Flynn’s sentence includes four years in prison, three years of supervised release, and restitution. He has already pleaded guilty to nine counts of wire fraud.
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Key Facts
- State: Massachusetts
- Category: White Collar Crime
- Source: DOJ Press Release â†â€â€
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