A man whose sentence was reduced by former President Donald Trump has just been charged with fraud from a Ponzi-like scheme.
On Trump’s last day as president, he changed Eliyahu Weinstein’s 24 years sentence after his conviction for defrauding his investors on two different occasions. This fraud cost these investors $230 million in losses.
Weinstein was released from prison in January 2021, serving less than eight years of his sentence.
On Wednesday, Weinstein and four other men were all charged with conspiracy to obstruct justice and conspiracy to commit wire fraud. They defrauded $35 million from more than 150 people and Weinstein was able to do so by hiding his true identity.
Weinstein appeared in federal court along with his co-defendants, Shlomo Erez and Aryeh L. Bromberg. The two remaining defendants, Joel L. Wittels and Alaa M. Hattab, have not yet been found.
In a statement released by the U.S. attorney for New Jersey Philip R. Sellinger said, “These were brazen and sophisticated crimes that involved multiple conspirators and drew right from Weinstein’s playbook of fraud.”
After Weinstein was released from prison in 2021, he started his schemes right back up and used the company Optimus Investments Inc. (Optimus) and the alias “Mike Konig” to continue his fraudulent activity. Bromberg and Wittels knew his true identity and helped him keep it hidden. As Weinstein stated in a conversation that was recorded, if the investors knew his true name they would not give them any money.
Weinstein, Wittels and Bromberg got the majority of investor money from the company Tryon Management Group LLC, which Hattab and Erez owned.
The men used the Covid pandemic to trick people into investing their money into baby formula, first aid kits that were supposed to go to Ukraine and other supplies that were scarce during the time. People would invest their money with Tyron and then those funds would be transferred through Optimus to Weinstein.
By February 2022, Tyron was unable to give its investors any money, so they started a Ponzi scheme where they would all pool their money to pay off the investors.
This did not last very long and just six months later the gig was up, and Weinstein revealed his identity to the owners of Tyron in a meeting that was being secretly recorded. In another meeting, he admitted that he misappropriated the investor money from Tyron and additionally made various statements that were all false about Optimus deals. He stated, “I finagled, and Ponzied, and lied to people to cover us.”
After the owners found out the truth, they allegedly agreed to conceal his identity and to continue raising more money to pay off their investors in a scramble to save their scheme that was already falling apart.
The defendants additionally conspired to obstruct justice, which is the second charge they are currently facing. They assisted Weinstein in hiding his assets from the government that was meant to pay the $200 million he owed in restitution from his previous crimes.
They are each facing up to 25 years in prison, as wire fraud is punishable by a maximum of 20 years and obstruction of justice is five years. Additionally, they can be fined either $250,000 per count or twice the amount they gained or lost from the offense, whatever amount is the greatest.
