Failed Lakewood Financier Weinstein Faces New Charges
The onetime Lakewood financier who was sentenced to 22 years in prison for running a multimillion-dollar real-estate investment scam faces new allegations of fraudulent stock and condo deals.
Eliyahu Weinstein, 38, was indicted on a total of 13 counts of conspiracy to commit wire fraud, commission of wire fraud during pretrial release, and transacting criminal proceeds, according to information from the office of New Jersey U.S. Attorney Paul Fishman.
Prosecutors seek seizure of all money Weinstein is accused of collecting from marks who thought they were buying pre-launch Facebook stock and condos and apartments in Florida, authorities said.
Weinstein, Alex Scheider and Aaron Muschel were charged with fraud related to Facebook shares last May.
Investigators believe that the trio induced investors to plunge into large blocks of Facebook stock in February 2012, before its initial public offering, while actually having no access to them.
The victims wired millions to an account that Weinstein and another cohort controlled, and were shown bogus documents delineating companies with assets to secure their investments, investigators said.
Prosecutors say Weinstein and the others spent the money themselves – Weinstein to pay for lawyers and experts in the criminal case for which he was eventually sentenced, and in related civil actions – sank some of it into other companies and used part of it fto issue loans.
From that point, investors who thought they had bought Facebook shares were induced to invest in a Florida apartment complex, Belle Glade Gardens, with the understanding that Weinstein and his codefendants would flip it for a quick and sizeable profit, investigators said.
At this point, authorities said, Weinstein was already under indictment and on pretrial release for the real-estate Ponzi scheme that cost investors well over $200,000,000, requiring court approval for any transaction exceeding $1,000.
Investors, told that a sum of $2,500,000 would match the amount already held by a Miami law firm and secure the transaction, wired $2,830,000 to the lawyers, prosecutors said.
Weinstein and his codefendants are accused of redirecting the money to their accounts and returning $1,800,000 to investors under the guise of profit from their Facebook purchases.
Between July and December 2012, investigators said, Weinstein convinced another group of victims to put up $1,500,000 as half of an investment to buy notes on seven Florida condos that they were told generated rental income of $780,000 a year.
They were unaware that Weinstein had once owned many of them and lost them in foreclosure proceedings, authorities said. The defendants are accused of lavishing the money on themselves.
In addition to the 22 years he’s already committed to serve, Weinstein now faces another 20 years for the conspiracy count, another 30 for the wire fraud charges and up to 10 years for transacting in criminal proceeds. Each charge also carries possible fines as high as $250,000.