Chicago Real Estate Broker Sentenced to Four Years for Fraud

A Chicago real estate broker has been sentenced to four years and two months in federal prison for orchestrating a multimillion-dollar fraud that duped investors out of more than $3 million.

Stanislav “Steve” Sannikov, 42, pleaded guilty last year to a federal wire fraud charge for misrepresenting real estate investment opportunities through his company, Chestnut Realty Group. Sannikov told investors he could negotiate the purchase of properties on their behalf, then re-sell or lease the assets at a profit, according to the U.S. Attorney’s Office for the Northern District of Illinois.

But federal prosecutors said the properties were not for sale or lease, and in some cases did not exist as viable investment options.

Sannikov directed his victims to deposit earnest money into what he described as an escrow account maintained by Chestnut Realty. In reality, the account was a checking account he personally controlled, and Chestnut was not licensed to act as an escrow agent.

He then used the investor funds to bankroll his own lifestyle, authorities said. One victim, a man in his 70s, was forced to delay retirement to cover the losses.

The scheme targeted at least four individuals between 2016 and 2020. Sannikov was ordered by U.S. District Judge Joan Humphrey Lefkow to pay more than $2.19 million in restitution to the victims on Friday.

“This was not a one-time lapse in judgment,” said Assistant U.S. Attorney Sheri H. Mecklenburg during sentencing. “[Sannikov], over the course of at least four years, designed and engaged in a calculated, sustained, multi-faceted scheme to defraud multiple individuals.”

Sannikov’s conviction is one extreme addition to a growing list of Illinois real estate professionals who have come under scrutiny in recent years for misusing client funds, falsifying deal terms or overstating investment opportunities.

Last fall, Chicago broker Diego Torres had his license revoked after allegedly defrauding multiple Latino homebuyers out of nearly $190,000 through a series of fabricated foreclosure sales.

Offenders featured in The Real Deal’s “Brokers Behaving Badly” investigative saga include brokers Milla and Andrew Russo, who were found by a court to have made “deceptive claims” and altered a contract to falsely claim commission on a $4.9 million beachfront home sale in Jupiter, Florida. Florida’s Real Estate Commission dismissed complaints against them despite the 2022 ruling, allowing them to continue operating without penalty.