Brooklyn, NY – Midwood Man Arrested In Connection With Multimillion-Dollar Fraudulent Investment Scheme

Brooklyn, NY – A Brooklyn Orthodox Jewish man was arrested this morning by the FBI on wire fraud and securities charges stemming from an alleged scheme to defraud multiple investors of approximately $7 million through a fraudulent investment scheme that he allegedly perpetrated for at least five years.

37 year old Yair Trebitch allegedly lied to investors by telling them that he would use their money to trade in securities through an investment fund that he controlled, generating double-digit returns with very low risk.

Instead, Trebitch allegedly invested only a portion of the investors’ money and suffered enormous trading losses, which he failed to disclose to the investors.

Read full complaint here

Trebitch allegedly used the remainder of the investors’ money for his own personal benefit and to pay back other investors.

Trebitch was presented today before United States Magistrate Judge Debra Freeman.

Terbitch is married to Michelle Trebitch the daughter of former Assembly speaker Sheldon Silver.

According to the allegations in the two-count Complaint unsealed today in Manhattan federal court:

From 2009 through December 2014, Trebitch engaged in a multimillion-dollar fraudulent investment scheme, during which he solicited money from investors based on materially false and misleading representations. Specifically, Trebitch told the investors that he would use their money to purchase large-cap stocks through an investment fund called Allese Capital LLC, which Trebitch co-owned with his wife, who was a certified public accountant. Trebitch told the investors that he would purchase and sell stocks on a daily basis, with little or no funds invested in the market at the end of each trading day, which would minimize the risk of loss, and result in double-digit annual returns in the range of 14 to 16 percent. In fact, Trebitch invested only a portion of the investors’ money, and instead principally used the investors’ money for his own personal benefit, including to repay other investors.

With respect to the portion of investor funds that he did use to purchase securities, Trebitch suffered net trading losses, which he did not disclose to the investors. Rather, Trebitch sent the investors false and misleading monthly account statements and tax forms, which purported to show positive annual returns in range of 15 to 19 percent on the investors’ investment in Allese.

During the course of the fraudulent scheme, Trebitch solicited more than $7 million from multiple investors.

Trebitch, is charged with one count of wire fraud and one count of securities fraud. The wire fraud count and the securities fraud count each carry a maximum sentence of 20 years in prison; the wire fraud charge carries a maximum fine of $250,000, or twice the gross gain or loss from the offense, and the securities fraud charge carries a maximum fine of $5 million, or twice the gross gain or loss from the offense.

The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

U.S. Attorney Preet Bharara said: “Investing in securities entails certain risks, but should not include the risk of being defrauded by one’s investment manager. Investment fraud is a high priority for this Office. I want to thank the FBI for working with us to protect investors and their money.”

FBI Assistant Director-in-Charge Diego Rodriguez said: “As alleged, Trebitsch took $7 million in investor money under false pretenses. Allegedly promising double digit returns to investors, Trebitsch suffered losses on what money he did invest. Trebitsch finds himself under arrest on securities and wire fraud charges.”