Chicago real estate broker sentenced to 4 years for fraud scheme, ordered to pay more than $2M to victims

CHICAGO — A Chicago real estate broker who used a fraud scheme to bilk at least four investors out of more than $3 million was sentenced to four years in federal prison and has been ordered to pay over $2 million in remaining restitution to his victims.

The U.S. Attorney’s Office for the Northern District of Illinois announced Wednesday the sentencing for 42-year-old Stanislav Sannikov — also known as “Steve” Sannikov — who owned and operated Chestnut Realty Group in Chicago.

According to prosecutors, from 2016 to 2020, Sannikov fraudulently claimed to investors that certain properties were for sale and that he could negotiate the purchase on their behalf. Sannikov further claimed that the properties could be re-sold or leased for a substantial profit. 

However, prosecutors say Sannikov knew the properties were not available for sale or lease, but he still induced the victim investors to deposit money into what he told them was an escrow account maintained by Chestnut Realty.

Chestnut Realty was not, in fact, licensed to act as an escrow agent, which prosecutors say Sannikov knew. The account was actually a checking account controlled by Sannikov, who used it to withdraw investor funds and spend the money on his “own lavish lifestyle,” according to prosecutors.

Prosecutors say one of Sannikov’s victims, now in his 70s, had to put off his retirement in order to pay off his losses.

Sannikov pleaded guilty last year to a federal wire fraud charge, and in February he was sentenced by U.S. District Judge Joan Humphrey Lefkow to four years and two months in federal prison.

On Friday, Lefkow ordered Sannikov to pay $2.19 million in remaining restitution to four victims.

“This was not a one-time lapse in judgment,” Assistant U.S. Attorney Sheri H. Mecklenburg argued in the government’s sentencing memorandum for Sannikov. “(The) defendant, over the course of at least four years, designed and engaged in a calculated, sustained, multi-faceted scheme to defraud multiple individuals.”