Yorkville Realtor Charged With Operating $23 Million Ponzi Scheme

YORKVILLE, IL — Federal prosecutors in Chicago have charged 47-year-old Michelle Labra, a Yorkville Realtor, with wire fraud and making a false statement for allegedly orchestrating a $23 million Ponzi scheme. She is facing a maximum 65 years in prison if convicted.

Labra owned and operated Labra Group Realtors, an Aurora-based LLC, and promised at least 25 investors outsized returns as part of a fraudulent real estate investment program, prosecutors allege. Between 2009 and 2015, Labra collected $23 million from the investors, spending about $19.6 million of it to pay back earlier investors and using the rest for expensive jewelry and personal vacations to Jamaica, Mexico and Guatemala, according to an indictment unsealed Thursday.

Prosecutors called the program a Ponzi scheme, a type of fraud where investors are promised lucrative returns; however, their investments are not invested all, but instead used to pay back earlier investors who were promised the same thing. It is named for depression-era fraudster, Charles Ponzi.

According to court documents, Labra told investors that their money would be used to make short-term, high-interest loans, secured by the borrowers homes, promising repayment of principal, 14 percent interest and a $500 service fee. None of that appears to have ever happened.

Prosecutors say Labra sent investors phony deeds, promissory notes and other documents from non-existent borrowers and lied to conceal the scheme, telling investors in one instance that the IRS had seized their funds.

"Stay away!" reads one 2015 review of Labra's realty group on Yelp. "These people committed fraud both identity and criminal theft. If you are reading this, know they are not who they say they are and if you give them money, you will not see it again."

Another review warns prospective investors not to do business with Labra. "Michelle Labra, with the knowledge and help of her family, stole over $325,000 in earned commissions from me in 2015," said user Larry S. in 2016. "They bounced over $92,000 in commission checks to me. It is alleged that they also embezzled millions of dollars from investors in Illinois and around the country with a phony peer-to-peer loan scam."

Labra's arraignment in federal court in Chicago has not yet been scheduled, according to the U.S. Attorney for the Northern District of Illinois. Each of three counts of wire fraud carries a maximum sentence of 20 years in prison, while the false statements charges carries five.

As in every case, charges are merely accusations, not proof of guilt.

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