Bay Harbor Islands’ longtime attorney pleads guilty in $7M real estate fraud 

The former town attorney for Bay Harbor Islands pleaded guilty to two counts of wire fraud after allegedly orchestrating a multimillion-dollar real estate scheme. 

Craig Sherman, town attorney for more than 40 years, admitted that he defrauded friends and clients through the scheme, which ran from 2013 to 2020. Sherman secured investments for real estate projects planned in Bay Harbor Islands, but instead of using those funds for the developments, he used the money for personal expenses and for his law firm, Boca Raton-based Sherman & Sherman. He also used the funds to pay other investors back, court filings show. 

He resigned in 2019 after a lawsuit accused him of stealing nearly $5 million from an investor who was promised a 10 percent annual return on their investment, the Miami Herald reported at the time. 

The fraud ended up totaling nearly $7 million, according to the U.S. Attorney’s Office for the Southern District of Florida.  

Sherman was charged with eight counts of wire fraud following an FBI investigation into the scheme. Sherman, who is 80, could face up to 40 years in prison for the two counts of wire fraud, in addition to having to pay restitution. 

Sherman told investors he was authorized to broker the sale of development rights in the town. He promised investors — in what turned out to be fake real estate developments — that they would receive between 6 percent and 8 percent in annual interest for their loans, with the principal to be returned when the projects were completed. 

He even told one of his investors that the town of Bay Harbor Islands had imposed a building moratorium that affected the fake projects, according to the indictment. 

South Florida, known as the fraud and money laundering capital of the country, has seen more than its fair share of wire and PPP fraud involving developers, real estate agents and projects. 

Earlier this month, former developer and West Palm Beach resident Robert Matthews was sentenced in Connecticut federal court to over five years in prison for a series of frauds spanning Connecticut, Massachusetts and Florida. Matthews faced charges of conspiracy, money laundering, and tax evasion related to real estate swindles that caused losses of over $30 million to banks and investors. 

Miami real estate agent Daniela Rendon, who pleaded guilty in April to wire fraud that was tied to her misuse of nearly $330,000 of pandemic relief funds, is expected to be sentenced this month. She allegedly used the money to lease her white Bentley Bentayga, rent a luxury apartment and more. Rendon could face up to 20 years in prison.

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