Eric Malley, the founder and former CEO of private equity investment firm MG Capital Management, has pleaded guilty to securities fraud for running a real estate investment scam that tricked 335 investors into forking over an estimated $58 million.

In 2014, Malley started a real estate investment fund called MG Capital Management Residential Fund III, and three years later he launched MG Capital Management Residential Fund IV. According to the allegations against Malley listed in court documents, he promised investors they would be able to own an equity interest in hundreds of income-producing luxury properties throughout Manhattan. He also boasted about having a debt-free investment strategy that was based on sophisticated proprietary analytics he had developed during his career in real estate.

In addition to telling investors that the funds were debt free, he also told them that the properties held…

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