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Trenton, NJ - Lakewood Real Estate Fraudster Pleads Guilty To Scheming Millions; Faces Up To 25 Years

Published on: January 3, 2013 04:14 PM
Last updated on: January 3, 2013 07:38 PM
By: USDOJ Press Release
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Developer Eli Weinstein is led by the FBI from his Lakewood home after being arrested Aug 12 2010. Weinstein plead guilty on Jan. 3 2013 to running a Ponzi scheme that cost investors 200 million. Photo courtesy to VINnews.com by the Star-Ledger at NJ.comDeveloper Eli Weinstein is led by the FBI from his Lakewood home after being arrested Aug 12 2010. Weinstein plead guilty on Jan. 3 2013 to running a Ponzi scheme that cost investors 200 million. Photo courtesy to VINnews.com by the Star-Ledger at NJ.com

Trenton, NJ - An Ocean County, N.J., man today admitted that he ran a real estate investment fraud scheme that caused $200 million in losses and then laundered the proceeds of the scheme, U.S. Attorney Paul J. Fishman announced.

Eliyahu Weinstein, 37, of Lakewood, N.J., pleaded guilty before U.S. District Judge Joel A. Pisano in Trenton federal court to two counts of the Indictment pending against him: one count of conspiracy to commit wire fraud, and one count of money laundering. Weinstein’s trial on these charges was scheduled to start Jan. 7, 2013.

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Weinstein’s co-defendant, Vladimir Siforov, is charged in the Indictment with three counts of wire fraud and remains a fugitive.

Under the terms of the plea agreement, which Judge Pisano accepted today, Weinstein may be sentenced to up to 25 years in prison and up to three years of supervised release. He must also provide a full accounting of all monies paid to him during the period covered by the Indictment. Weinstein has also agreed to forfeit $2 million in seized property and pay restitution to the victims of his offenses. Sentencing is scheduled for April 2, 2013.

“Weinstein shamelessly exploited investors’ trust, using doctored documents for properties he didn’t own – including in a town that doesn’t exist – and continued to commit crimes while out on bail,” U.S. Attorney Fishman said. “With false promises of sound investments and charitable donations, he stole $200 million, spending freely on fancy cars, jewelry and gambling trips. And in using victims’ money to collect Judaica, Weinstein robbed from his own community’s present to stockpile artifacts of its past.”

FBI Acting Special Agent in Charge David Velazquez said: “Mr. Weinstein came to the wrong conclusion when he assumed he would never be held accountable for his criminal activity. His greed got the best of him and he will pay a heavy price before the law for the frauds he committed.”

According to documents filed in this case and statements made in court:

From June 2004 through August 2011, Weinstein orchestrated – with the help of Siforov and others – a real estate investment fraud scheme, headquartered in Lakewood, that has resulted in multi-million dollar losses to victim investors.

To induce victims to invest, Weinstein and others made various types of materially false and misleading statements and omissions. Weinstein and others told victims that Weinstein’s inside access to certain real estate opportunities allowed him to buy a particular piece of property at a below-market price. Weinstein and others also told victims that their money would be used to purchase a specific property, and the property would be quickly resold – or “flipped” – to a third-party purchaser that Weinstein had lined up. Victims were also told that the victims’ money would be held in escrow until the closing of a purported real estate transaction.

Weinstein bolstered his lies by creating, and causing to be created, various types of fraudulent documents, including “show checks,” which Weinstein led victims to believe represented Weinstein’s investments in specific transactions, but which in fact were never deposited; forged checks, which had actually been negotiated for small amounts, but which Weinstein altered so as to appear worth millions of dollars; and various kinds of phony legal documents, including mortgages, and deeds.

Weinstein and others initially targeted victims from the Orthodox Jewish community to which Weinstein belonged, exploiting his standing in, and knowledge of, the customs and practices of this community to further the scheme. This type of illegal activity is commonly referred to as “affinity fraud,” and refers to investment scams that prey upon members of identifiable groups, such as religious or ethnic communities, the elderly, or professional groups.

The perpetrators of affinity fraud scams frequently are, or pretend to be, members of the group, and they exploit the trust and friendship that exist in groups of people who have something in common.

Weinstein abused the Orthodox community’s practice of engaging in transactions based on trust, and without paperwork, to obtain money from his victims without substantial written records. He would then falsely represent that specific real estate transactions existed, that the victims’ monies were used to fund those transactions, or that the victims’ profits from those transactions were being “rolled” into new investments. Weinstein also used a portion of the fraud’s proceeds to fund “charitable and religious contributions,” which he used to elevate his reputation within the Orthodox Jewish community.

By 2010, Weinstein had tarnished his reputation in the Orthodox Jewish community due to the massive losses caused by his fraud scheme and found it difficult to obtain more money to further the scheme from within the Orthodox Jewish community. In April 2010, Weinstein and others began soliciting victims from outside of the Orthodox Jewish community, whom they defrauded out of additional millions of dollars.

Weinstein also used millions of dollars fraudulently obtained from his victims to fund his own lavish spending, including millions of dollars worth of antique Judaica and other artwork; a multi-million dollar collection of jewelry and watches; gambling in Las Vegas and elsewhere; and Weinstein’s personal expenses, including millions of dollars in credit card bills, millions of dollars in legal bills, and luxury car-lease payments.


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1

 Jan 03, 2013 at 04:43 PM Vozizalt Says:

Sentencing on the last day of Pesach...hmmmm

2

 Jan 03, 2013 at 05:13 PM Mandel Says:

Reply to #1  
Vozizalt Says:

Sentencing on the last day of Pesach...hmmmm

i guess he will still have the capability to say pesach "sifoch chmuschu open door"

3

 Jan 03, 2013 at 05:20 PM Yossi Says:

Unbelievable how this GANEF took so many heimishe yidden to the cleaners....
I just hope he has 25 years to do Tshuveh in prison so by the time he gets to bes din shel maleh he will be purified from Loy Signoyv.....
I believe his victims will not be very happy of not getting their money returned but how stupid were they all trusting him in the first place...being a millionaire dosent mean you have the brains not to fall for those traps.....

4

 Jan 03, 2013 at 06:05 PM benalt Says:

It says that "Weinstein had tarnished his reputation in the Orthodox Jewish community". I wonder if that means that they knew he was a thief but never told the authorities allowing him to continue his scheming?

5

 Jan 03, 2013 at 07:53 PM Show No Mercy Says:

No mercy should be shown to this individual, by the judge. The saying goes, that "if you do the crime, you do the time". Yidden have enough problems without this person causing additional problems, and hatred of Jews.

6

 Jan 03, 2013 at 09:09 PM UseYourHead Says:

This is no less a "toeivah" than homosexuality.

7

 Jan 03, 2013 at 09:33 PM in tears Says:

oy oy oy oy !!! when will this end? how many jews will suffer from this fraud?

8

 Jan 03, 2013 at 11:56 PM esther Says:

Reply to #3  
Yossi Says:

Unbelievable how this GANEF took so many heimishe yidden to the cleaners....
I just hope he has 25 years to do Tshuveh in prison so by the time he gets to bes din shel maleh he will be purified from Loy Signoyv.....
I believe his victims will not be very happy of not getting their money returned but how stupid were they all trusting him in the first place...being a millionaire dosent mean you have the brains not to fall for those traps.....

is that how cynical we've become,that to trust a yid,who appears to be erlich,is stupid?

9

 Jan 04, 2013 at 12:12 AM shlomogabai Says:

I pitty him. he got lost for money! (a sickness?)

#6, I guess this is chadushei reb UseYourHead. cause the torah doesn't read everything "toeivah", It's liberals who take words and try finding some similarity just to justify their lust for "toeivah".

#5, While I agree on the "Yidden have enough problems without this person causing additional problems, and hatred of Jews", he's still a brother, litvish, mizrachi, or modern orthodox. doesn't matter, Jews don't gloat on anothers downfall (it's never helped anybody besides the point).

#7) TOTALLY AGREE AND LETS UNIFY OUR TEARS! I'm in tears for "how many jews will suffer from this fraud" as well as another brother fell for his evil inclination. And especially in a manner where it's a tremendous chillul h-m.

10

 Jan 04, 2013 at 12:21 AM bmw Says:

he bounced a check on me... and then when i confronted him about the bounced check.... he began attacking me verbally! One thing good about weinstien he helped out with my chasuna expenses 10 years ago.... little did i know his charity was OPM!!

11

 Jan 04, 2013 at 12:44 AM Sol Says:

Reply to #3  
Yossi Says:

Unbelievable how this GANEF took so many heimishe yidden to the cleaners....
I just hope he has 25 years to do Tshuveh in prison so by the time he gets to bes din shel maleh he will be purified from Loy Signoyv.....
I believe his victims will not be very happy of not getting their money returned but how stupid were they all trusting him in the first place...being a millionaire dosent mean you have the brains not to fall for those traps.....

I believe his victims will not be very happy of not getting their money returned but how stupid were they all trusting him in the first place.

If the rich Bergers from London conned in by this guy anyone else can.
All you need is a good Sweet tongue and good Community grooming methods which he had!
Lets hope his family doesn't suffer too much! They too are not at fault!

12

 Jan 04, 2013 at 01:08 AM Brooklynhocker Says:

Reply to #10  
bmw Says:

he bounced a check on me... and then when i confronted him about the bounced check.... he began attacking me verbally! One thing good about weinstien he helped out with my chasuna expenses 10 years ago.... little did i know his charity was OPM!!

Pure Loshon Hora- why do I need to know that ? You want to do something Litoeles? Tell young people to stop investing with big machers like Salomon and David and maybe they'll still have some chasuna money left once the dust settles.

13

 Jan 04, 2013 at 08:11 AM #5 Says:

Dummy! He was arrested already in 2010; that's why his rep went down- no one needed to tell the authorities anything. Stop digging so hard to find lashon hara on Jews.

14

 Jan 04, 2013 at 09:42 AM Show No Mercy Says:

To #9-SchlomoGabbbai- I did not gloat at this individual's fate. My point was that this person has caused a lot of suffering, both financial and psychological to our community. Therefore, he has to pay the penalty, even if he is a "brother".
Whereas we can forgive him, we cannot forget the irreparable harm that he has caused to our community. A shanda!!

15

 Jan 04, 2013 at 10:21 AM bewhiskered Says:

Reply to #1  
Vozizalt Says:

Sentencing on the last day of Pesach...hmmmm

"Sentencing on the last day of Pesach...hmmmm"

So, you think the judge took out his עזרת תורה לוח, so that he would be able to look up אחרון של פסח, on which to sentence Weinstein? You're kidding, right?

16

 Jan 04, 2013 at 11:07 AM Realist77 Says:

The shtick that worked in Yeshiva, does not work in th real world. In the real world there are consequences to your actions. Like the Hebrew National Hot Dog commercials state, " We answer to a higher authority".

17

 Jan 04, 2013 at 12:32 PM bigwheeel Says:

Reply to #1  
Vozizalt Says:

Sentencing on the last day of Pesach...hmmmm

His lawyer will probably fie for a change of calendar.

18

 Jan 04, 2013 at 12:45 PM Kzler Says:

Beautiful not a leftist socialist democrat but a fine torah learning person with a velvet yarmulke not a knitted yarmulke, yashar koach and I am sure it enhances our status among goyim and the freie Yidden of course

19

 Jan 04, 2013 at 02:33 PM BeDanLekafZchus Says:

Regardless of what the general Kol is about this case, him pleading guilty should not make him guilty in our eyes. We don't know the truth or what actually happened! Court can be evil, and pleading guilty is sometimes the lesser of two evils!

20

 Jan 05, 2013 at 06:33 PM clear-thinker Says:

Reply to #19  
BeDanLekafZchus Says:

Regardless of what the general Kol is about this case, him pleading guilty should not make him guilty in our eyes. We don't know the truth or what actually happened! Court can be evil, and pleading guilty is sometimes the lesser of two evils!

Right pleading guilty makes him innocent. Forget about not guilty actually innocent. After all he looks like a frum Jew. Even if he did the acts he should be freed after all he looks like a frum Jew.
Nothing should make us think he is guilty, unless a victim is a frum Jew. Wait the victim is a frum Jew, let me think a little

21

 Jan 06, 2013 at 03:20 PM Anonymous Says:

Reply to #19  
BeDanLekafZchus Says:

Regardless of what the general Kol is about this case, him pleading guilty should not make him guilty in our eyes. We don't know the truth or what actually happened! Court can be evil, and pleading guilty is sometimes the lesser of two evils!

"Court can be evil, and pleading guilty is sometimes the lesser of two evils!"

No innocent man will plead guilty. You are living in la-la land.

22

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