David Saks: Yet Another Reason to Avoid Facebook Like Bubonic Plague

David Saks - Real Estate Broker - The Real Estate Mart of Tennessee, Inc. - 4040 North Watkins-Suite #4 - Memphis, Tennessee 38127 - Phone (901) 357-4663

Yet Another Reason to Avoid Facebook Like Bubonic Plague

Convicted Ponzi Schemer Indicted on New Fraud and Other Charges

U.S. Attorney’s Office April 17, 2014
  • District of New Jersey (973) 645-2888

NEWARK—An Ocean County, New Jersey man who was sentenced less than two months ago to 22 years in prison for running a Ponzi-style real estate scheme was indicted by a federal grand jury today on new charges of conspiracy, wire fraud, and transacting criminal proceeds while on pretrial release, U.S. Attorney Paul J. Fishman announced.

Eliyahu Weinstein, 38, of Lakewood, New Jersey, was indicted on one count of conspiracy to commit wire fraud, five counts of wire fraud committed while on pretrial release, and seven counts of transacting in criminal proceeds. The government is seeking the seizure and forfeiture of all funds fraudulently obtained by Weinstein as a result of the scheme.

According the indictment and documents filed in this and other cases:

Weinstein allegedly defrauded victims through three investment schemes:

(1) pre-IPO shares of Facebook stock;

(2) the purchase of an apartment complex in Florida;

(3) the purchase of the mortgage notes on seven Florida condominiums.

Weinstein and co-defendants Alex Schleider and Aaron Muschel were originally charged by criminal complaint with the Facebook fraud in May 2013.

In February 2012, Weinstein and his fellow conspirators allegedly offered a pair of investors (referred to in the indictment as the “Facebook victims”) the opportunity to purchase large blocks of Facebook shares prior to the company’s initial public offering, or IPO, in May 2012.

The offer was particularly attractive because large blocks of the shares were extremely difficult to get, and they were expected to increase in value at the time of the IPO. Weinstein and his conspirators did not actually have access to the shares.

Based on alleged misrepresentations by Weinstein and his conspirators, the Facebook victims wired millions of dollars between February and March 2012 to an account Weinstein and a conspirator controlled.

Weinstein and another conspirator convinced the Facebook victims to send the money by, among other things, providing them with false documents showing companies owned by various conspirators held assets which would secure the Facebook victims’ investment.

The conspirators did not use any of the Facebook victims’ money to purchase Facebook shares, instead misappropriating it for their own use and benefit by moving it through various accounts.

Weinstein used some of the money to pay lawyers and experts representing him in his earlier—and at that time, still pending—criminal case and in related civil matters.

Weinstein and his conspirators also used the Facebook victims’ money to make investments in a number of different businesses unrelated to Facebook and to make loans for their own benefit.

Around the same time, Weinstein and his conspirators also persuaded the Facebook victims to invest in the purported purchase of an apartment complex, Belle Glade Gardens, in Florida.

They falsely told the Facebook victims that Weinstein had the opportunity to purchase Belle Glade Gardens at a discounted price and immediately flip it at a substantial profit.

Weinstein and his conspirators further told the Facebook victims that Weinstein had already placed $2.5 million in the trust account of a Miami law firm for the transaction; that if the Facebook victims contributed another $2.5 million toward the transaction, those funds would remain in escrow at the Miami law firm until the deal closed; and that the Facebook victims would be repaid within 60 days.

In reliance on these representations, the Facebook victims wired approximately $2.83 million to the Miami law firm in order to complete the Belle Glades Gardens transaction. Weinstein and his conspirators, however, did not use the money to purchase Belle Glades Gardens. Instead, they allegedly redirected the money from the law firm to accounts that they controlled, returned $1.8 million to the Facebook victims as a purported return on their Facebook investment, and used the remaining money for their own purposes.

In July 2012, Weinstein allegedly approached another group of investor victims (referred to in the indictment as the “Florida condominium victims”) and told them that he had the opportunity to purchase the notes on seven condominiums in Florida at a discounted price of $3 million. Weinstein and his conspirators falsely represented that they had already paid $1.5 million toward the deal and that they needed only $1.5 million to complete the transaction. They claimed that the properties had an annual rental income of approximately $780,000 and provided to the Florida condominium victims fraudulent documentation purporting to verify this fact. The Florida condominium victims transferred approximately $1.5 million to Weinstein and his conspirators between August 2012 and December 2012. Weinstein did not use this money to purchase the notes on the Florida condominiums—many of which he himself had previously owned and lost to foreclosure. Instead, Weinstein and his conspirators converted the money to their own use and benefit.

Throughout the scheme, Weinstein was already under indictment and on pretrial release and was prohibited from engaging in any monetary transaction for more than $1,000 without the approval of court-appointed special counsel. Weinstein pleaded guilty on January 3, 2013, before U.S. District Judge Joel A. Pisano in Trenton, New Jersey, to two counts of that indictment, admitting he ran a Ponzi-style real estate investment fraud scheme that caused $200 million in losses and then laundered the proceeds of the scheme. Judge Pisano sentenced Weinstein on February 25, 2014, to 264 months in prison and ordered him to pay more than $200 million in restitution and forfeiture to the victims of his scheme.

The conspiracy count with which Weinstein is charged carries a maximum potential penalty of 20 years in prison; the wire fraud counts carry a maximum potential penalty of 30 years in prison (20 years on the wire fraud plus 10 years for commission while on pretrial release); and the transacting in criminal proceeds counts carry a maximum potential penalty of 10 years in prison. All the counts are also punishable by a $250,000 fine.

Charges against Muschel and Schleider, who were charged in the criminal complaint filed against Weinstein in May 2013, remain pending.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, for the investigation leading to today’s indictment. He also credited special agents of IRS–Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, for role in the case.

The government is represented by Counsel to the U.S. Attorney Rachael A. Honig; Gurbir S. Grewal, Chief of the U.S. Attorney’s Office Economic Crimes Unit; and Assistant U.S. Attorneys Zach Intrater of the Economic Crimes Unit and Evan S. Weitz of the Asset Forfeiture and Money Laundering Unit.

The charges and allegations against the defendants are merely accusations, and they are considered innocent unless and until proven guilty.

Today’s indictment is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorney’s offices and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.

http://www.fbi.gov/newark/press-releases/2014/convicted-ponzi-schemer-indicted-on-new-fraud-and-other-charges?utm_campaign=email-Immediate&utm_medium=email&utm_source=fbi-in-the-news&utm_content=315386




David Saks



Time&Temp Memphis

Legal Disclaimer
Please be advised that:

 The information and notices contained in this blog are intended to summarize recent developments and news. The posts are presented as general research and information. These posts are not intended, nor should be regarded, as legal advice. Some blog posts concern allegations made in civil lawsuits and in criminal indictments in United States Courts. All persons are presumed innocent until convicted of a crime and proven guilty. Readers who have particular questions or who believe that they need legal counsel should seek the advice of a qualified attorney. It is neither the editor's or author's intention to create a confidential relationship or any broker-client relationship via communication from this site at any time. Please consult with your state real estate board if questions & answers in the education section conflict with the laws of your region or if you need clarification regarding their applicability or how they may govern the services that you provide.

By entering this web site, you understand the following:
When you select a link to an outside Web site, you are subject to the privacy, copyright, security, and information quality policies of that Web site. David Saks:
1.DOES NOT control or guarantee the accuracy, legality, relevance, timeliness, or completeness of information contained on a linked Web site;
2.DOES NOT endorse linked Web sites, the views they express, or the products/services they offer unless linked web sites, the views they express, or the products/services they offer endorse or support David Saks in accordance with the standards of the Tennessee Real Estate Commission and the Federal Government's laws regarding commerce and the application, solicitation and transmission of internet-related concerns, commerce or social networking;
3.CANNOT authorize the use of copyrighted materials contained in linked Web sites;
4.IS NOT responsible for transmissions users receive from linked Web sites;
5. That DavidSaks.Com is biographical & real estate related. Some links within will leave this site.
6. http://activerain.com/profile/davidsaks is internet-compliant & abides by the rules & regulations of the Tennessee Real Estate Commission, Eve Maxwell, Executive Director.
7. Unless indicated otherwise, ActiveRain does offer listings, or IDX and is provided for licensed salespersons, brokers, buyers & sellers of real property as a community & professional service.
8. David Saks is a retired / licensed real estate broker in the State of Tennessee, license #290452, and an independent contractor.
9. Information is believed to be accurate, but not guaranteed, at any realty link or document connected to the World Wide Web & viewable by anyone connected to the internet who has a web browser.
10. Brokers, buyers, sellers, agents & anyone should independently verify any information prior to submitting any offer to purchase goods & services from any link.
11. Please Visit The American Real Estate Alliance or Memphis.8k.Com for additional information regarding property issues for real estate professionals and consumers.

 

Photos © & Licensed by Nova Development

All Content Protected © 
Before you even think about
committing a real estate crime
click this red button.
Real Estate Crimes

© All Rights Reserved.

 

 

 

 

"Information generated by the Department of Justice is in the public domain and may be reproduced, published or otherwise used without the Department’s permission. Citation to the Department of Justice as the source of the information is appreciated, as appropriate."

Department of Justice Legal Policies


 

  Real Estate Crimes

 

Click "HERE" For Today's Question

 

 

TheListen Now!

David Saks Show

Saturday Nite

9pm-12am Central

University of Memphis

WUMR

 

Support
America's Hobby

Click Elvis

Mr.Saks' participation in ActiveRain ended April 13, 2015.

His blog archives will remain online.

May God bless you.

Comment balloon 4 commentsDavid Saks • April 18 2014 07:53AM

Comments

Thanks, David for the story on this scammer!  Nothing is better than to see crooks removed and placed in prison for their scandalous endeavors.  NOW, if we can figure out how that works for Congress!

Posted by Dan Hopper, Denver Realtor / Author / Advocate/Short Sale (Keller Williams Realty Downtown LLC) almost 6 years ago

Dan. I reblog FBI and Department of Justice press releases if they're real estate related. Nice to hear from you.

Posted by David Saks ((retired)) almost 6 years ago

David thanks for sharing, I would not have known about these cases you blog about.

Have a great week.

Posted by Jennifer Fivelsdal, Mid Hudson Valley real estate connection ( JFIVE Home Realty LLC | 845-758-6842|162 Deer Run Rd Red Hook NY 12571) almost 6 years ago

Thanks Jennifer.

Posted by David Saks ((retired)) almost 6 years ago

This blog does not allow anonymous comments