Branford Man Admits to DeFrauding Investors of $2 Million

Juan Jose Alvarez de Lugo, 53, of Branford, waived his right to an indictment and pleaded guilty Sept. 18 before Senior U.S. District Judge Warren Eginton. 

The charges were to one count of wire fraud stemming from his operation of a real estate investment scheme that defrauded individuals out of more than $2 million, according to a press release issued by Deirdre Daly, acting U.S. Attorney for Connecticut.

According to court documents and statements made in court, Alvarez de Lugo said he was the president of multiple successful businesses specializing in real estate development programs, representing to victim investors that his business was acquiring houses from the City of New Haven and from local banks, which would be remodeled and sold, and that invested funds would be used for this project. 

At times, Alvarez de Lugo represented to victim investors that he was working jointly with New Haven on the Livable City Initiative, and he stated that the remodeled homes would be used and occupied by low income families that secured financing from a local bank and State of Connecticut agencies, according to the press release.

He also told investors that he was developing a senior housing facility in New Haven. 

He provided investors with Promissory Notes and other documentation that promised to pay investors interest of 20 percent per year, and a full return of principal in one year, noted the report. 

In pleading guilty, Alvarez de Lugo admitted that the representations he made to victims were materially false, and that he did not invest his victims’ money as promised.  He did not own and develop the large number of properties he represented to investors, and he had no relationship with the City of New Haven or the State of Connecticut. 

He spent his investors' money on his own personal expenses, and enriched himself and his relatives, noted the US Attorney.

In five years, between 2005 and 2010, Alvarez de Lugo defrauded more than 10 victims out of least $2 million.

His three companies, Arquin Decoraciones LLC, Arquin Development LLC, and Juko Investments, LLC, and the investment instruments he provided, were never registered with the Securities and Exchange Commission or Connecticut Department of Banking.

Alvarez de Lugo faces a maximum term of imprisonment of 20 years.  He has been detained since January 18 when he was arrested on a federal criminal complaint.