Thursday, August 12, 2010
Lakewood real estate developer charged in alleged Ponzi scheme
LAKEWOOD —Eli Weinstein, a member of Lakewood’s ultra-Orthodox community who has been accused of ripping off former partners in courts from New Jersey to Israel, was arrested by federal agents early this morning and charged with a $200 million ponzi scheme.
The 35-year-old real estate investor and former used car salesman, taken into custody at his home, was charged with bank and wire fraud for allegedly running an investment fraud scheme, said the U.S. Attorney’s Office in Newark.
Weinstein faces a string of civil lawsuits seeking millions in damages over real estate transactions that span the world.
Records reviewed by The Star-Ledger also show that he was tied into at least one real estate deal with Solomon Dwek, the government informant behind a massive, high-profile federal sting that led to the arrests of more than 40 politicians and religious figures last summer.
The civil litigation by many of his former partners accuse him of being a scam artist.
Harvey Wolinetz of Florida, charged that Weinstein took nearly $80 million of his money involving the purchase of properties in New Jersey, Florida, New York, Tennessee, Georgia and Pennsylvania.
Andrew Mills/The Star-LedgerDeveloper Eli Weinstein is led from his Lakewood home after being arrested this morning. He is charged with running a Ponzi scheme that cost investors $300 million.
In a complaint filed in federal court, his attorneys charged that Weinstein, "engaged in a brilliant but diabolical pyramid scheme," that "forged or created multiple deeds, transfer documents, corporate documents and other financial records, and convinced his ‘investors’ to loan or invest hundreds of millions of dollars to acquire interests in properties" that were never actually purchased.
Weinstein will be brought before a U.S. District Court judge in Newark for a hearing later today.
Charged with Weinstein in a federal complaint was Vladimir Sifovrov, the owner of a New York trucking business and purported real estate broker.
Federal authorities contend Weinstein, Vladimir and an unnamed partner, since 2005, preyed on members of the tightly-knit Orthodox Jewish community throughout the world, many of whom had known each other since childhood, capitalizing on their social and religious bonds to be introduced to more and more victims.
Weinstein never owned property he claimed to own in many cases, and he repeatedly sold his fake and real interests multiple times, according to the complaint.