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.
Assistant U.S. Attorney Mark Coyne asked Weinstein to be held, saying he faces 50 years in prison and is a flight risk.
ReplyDeleteWeinstein appeared before U.S. District Judge Esther Salas wearing a gray pinstriped suit, white striped shirt, no tie, and silver handcuffs and leg irons.
“The exposure he is facing is off the charts,’’ Coyne said. “The weight of evidence against him is nothing short of overwhelming.’‘
Weinstein has been a frequent overseas traveler, traveling to Israel, Poland and the Ukraine, and was in Israel last week, Coyne said.
Weinstein’s New York City-based attorney, Ephraim Savitt, argued for Weinstein’s release, but said that because he was just notified this morning of the arrest, he had not had time to put together a bail package.
Prosecutors allege that Weinstein used some of his victims’ investments to amass a substantial collection of art, jewelry and Judaica, including manuscripts and antique Judaica worth approximately $6.2 million; a jewelry and clock collection worth about $7.6 million; a substantial collection of jewelry and watches valued at $6.2 million, including items from such high-end jewelers and watchmakers as Breguet, Bulgari, Cartier, Omega, Patek Phillippe, and Harry Winston.
ReplyDeleteWeinstein is believed to have used “third-party buyers” to sell real or fake interest in a single property multiple times to different victims; and also drew up fraudulent leases to make it appear that a property had substantial rental income. He also hid important information from investors, such as changes to zoning laws, that would have dramatically reduced the value of certain properties.
In addition to defrauding members of the Orthodox Jewish community, Weinstein also faces one count of bank fraud for allegedly bilking a Chicago bank out of $6 million.
One of the charities Eliyahu Weinstein allegedly laundered money through is the Yeshiva Gedola of Seagate (Brooklyn). Allegedly, $3.9 million went into the yeshiva's accounts and then back to Weinstein
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