• Wed. Apr 14th, 2021

Former commercial real estate exec Viktor Gjonaj charged with wire fraud in lottery scheme

A former Detroit area commercial real estate executive has been charged with wire fraud and faces up to 20 years in prison for allegedly bilking no fewer than two dozen investors of $26.4 million to play the Michigan Lottery.

Viktor Gjonaj, 43, the former head of Troy-based Imperium Group LLC, allegedly ran a scheme between 2016 and 2019 in order to fuel his Michigan Lottery habit that, at times, totaled $1 million in spending per week on the Daily 3 and Daily 4 games, a press release from U.S. Attorney Matthew Schneider’s office says.

Crain’s reported in March on the Shelby Township resident’s alleged scheme, which is the subject of multiple lawsuits in Oakland County Circuit Court claiming a total of $15.25 million in lost investor money, as well as at least $28 million in Daily 3 and Daily 4 winnings in less than a year.

It’s alleged that Gjonaj told his investors he would use their money to buy, develop and resell real estate at a profit, although a specific rate of return was not promised, according to the federal complaint. However, the complaint says none of the 66 real estate deals he presented to them ever materialized.

When he did repay investors a total of $7.4 million — using money he won by playing no less than $10 million on Michigan Lottery, not real estate investments — he included a 50 percent return, according to the complaint.

He allegedly created a sham company, Title Plus Title Service LLC, that his investors would wire money or write checks to. Their money was deposited into the Title Plus Title Services bank account, and then transfered to his own personal bank account or other bank accounts he controlled.

“This case shows us that criminals may use sophisticated methods and apparently legitimate businesses, but their crimes amount to nothing more than stealing other people’s money. The defendant’s gambling harmed not just himself, but many other innocent victims as well,” Schneider said in a statement.

A text message was sent to Gjonaj seeking comment Thursday afternoon.

He is being represented by high-profile criminal defense attorney Steve Fishman.

“Viktor Gjonaj was a well respected businessman who unfortunately developed a gambling addiction that lead to this situation,” Fishman told Crain’s Thursday afternoon. “His addiction was well known to the state of Michigan, which nevertheless allowed him to keep gambling.”

Gjonaj’s whereabouts have been the subject of speculation in commercial real estate circles for over a year. When asked where Gjonaj is, Fishman called that “a well protected secret.”

“Viktor Gjonaj repeatedly lied about the nature of his business, inducing investors to turn over money that he then squandered by playing the lottery,” said Timothy Waters, Special Agent in Charge of the FBI in Michigan. “The defendant’s lies have caught up with him and he will now face the consequences of his fraudulent scheme.”

The release says that in June 2016, he believed he found “a guaranteed way to win huge jackpots in the Michigan Lottery Daily 3 and 4 games.”

His winnings ultimately seemed to have dried up and, unable to repay the investors who unknowingly financed his gambling binge, he vanished in August 2019, leaving behind a trail of lawsuits in Oakland County and Macomb County circuit courts.

After rising through the ranks of the local commercial real estate industry as a broker specializing in Macomb County and retail, Gjonaj formed Imperium Group LLC in October 2017, four months after he won a $2.5 million prize playing the Daily 3 and Daily 4.

Less than a month after incorporating Imperium, he won another $4 million.

His winning streak continued into early 2018, with a $10 million payday on Jan. 29, a $9.625 million payday on Feb. 27, and another $2 million March 17 that year.

But by the summer 2019, his luck changed, eventually leading to the implosion and mass resignation of his real estate company’s staff after he stopped showing up to work.

Although Gjonaj continued to win large cash prizes, his former associate Gregory Vitto said in September 2019 testimony in Oakland County Circuit Court that they were not nearly the amounts that he had previously won.

His lottery spending began to outpace his winnings — and what he could allegedly get from people who thought they were investing in buildings and land, instead of paper tickets sold at thousands of retailers around the state.

“I’m glad to see that justice is going to be done,” said Ethan Holtz, partner for Southfield-based Jaffe Raitt Heuer & Weiss PC, who is representing two of the investors who were defrauded.

Some of the party stores who sold Gjonaj the lottery tickets have been sued in Oakland County Circuit Court.

The plaintiffs in the case are investors Jerome Masakowski and Kris Krstovski, who were awarded a $6.13 million judgment in 2019 in a separate but related lawsuit against Gjonaj. Seven other investors since August 2019 have sued him in separate cases in Oakland County Circuit Court.

The complaint says the stores gave Gjonaj “gifts of jewelry, automobiles (and) vacations” and had Michigan Lottery “tickets machines in their stores dedicated solely to” him.

The lawsuit claims the stores aided and abetted fraud; aided and abetted a breach of fiduciary duty; aided and abetted statutory stealing; committed a civil conspiracy; unjustly enriched themselves; made fraudulent transfers; committed negligence.

Most of the allegations were tossed out in court in September. Those dismissed were aiding and abetting fraud; aiding an abetting a breach of fiduciary duty; aiding and abetting statutory stealing; civil conspiracy; unjust enrichment; and negligence.

Picolo’s Liquor & Deli in Shelby Township was the alleged epicenter of Gjonaj’s gambling spree.

No other Macomb County lottery retailer comes close to replicating the prolific nature of Picolo’s Daily 3 and Daily 4 operation, which has sold over $30 million worth of tickets for the two games since FY 2014, according to state records.

In response to Gjonaj’s Daily 3 and Daily 4 play, the Michigan Lottery took the unprecedented step of limiting lottery terminals in 2018 to $5,000 in play per day.

Instead of slowing down as intended, he seems to have attempted to ramp up his play. Gjonaj allegedly recruited at least one person, Vitto, to work for him full time — ultimately with a job description that only ended up being to play the lottery.

To get around the $5,000 limit, Vitto went about establishing what he described in court testimony as a small network of Macomb County party stores at which he would play Daily 3 and Daily 4 to the tune of $80,000 a day for months. Vitto also suggested there were others who played on Gjonaj’s behalf.