UNITED STATES NEWS

Convicted fraudster who had sentence commuted by Trump is now facing new charges

Jul 19, 2023, 2:45 PM | Updated: Jul 20, 2023, 6:00 am

TRENTON, N.J. (AP) — A New Jersey man who was twice convicted of defrauding investors out of $230 million and whose lengthy prison sentence was commuted by President Donald Trump is once again facing fraud charges, federal prosecutors in New Jersey announced Wednesday.

Eliyahu “Eli” Weinstein, 48, of Lakewood, who is also known as Mike Konig, is among five men accused of defrauding dozens of investors out of $35 million, according to an arrest complaint unsealed in federal court in Trenton. The five are charged with wire fraud conspiracy and conspiracy to obstruct justice, and each could face up to 25 years in prison.

Philip Sellinger, the U.S. Attorney for New Jersey, said Weinstein used a fake name and falsely promised access to deals involving scarce medical supplies, baby formula and first-aid kits supposedly destined for wartime Ukraine.

“These were brazen and sophisticated crimes that involved multiple conspirators and drew right from Weinstein’s playbook of fraud,” Sellinger said.

Weinstein, Aryeh “Ari” Bromberg, 49, of Lakewood, and Shlomo Erez, 55, a citizen and resident of Israel, were due to make their initial court appearances Wednesday. Two others — Joel Wittels, 57, of Lakewood, and Alaa Hattab, 34, of Ottawa, Canada — remain at large. It wasn’t known if they have retained attorneys.

Weinstein was convicted two times in New Jersey federal court for defrauding investors. The first case involved a real estate Ponzi scheme, and the second stemmed from additional fraud he committed while on pretrial release.

For those crimes, which resulted in combined losses to investors of approximately $230 million, Weinstein was sentenced to 24 years in prison. On Jan. 19, 2021, the day before leaving office, then-President Trump commuted Weinstein’s term to time served after less than eight years into his sentence.

Shortly after he was released, Weinstein began orchestrating a new scheme to solicit money from investors through a company called Optimus Investments Inc., according to court documents. Using a fake name, he allegedly ran the firm with Bromberg and Wittels, with Weinstein’s true name and identity kept hidden because, as he acknowledged in a secretly recorded conversation, investors wouldn’t give them “a penny” if they learned of his involvement.

Weinstein, Bromberg, and Wittels received the bulk of investor money through a second company, Tryon Management Group LLC, which was owned and controlled by two other conspirators, according to the documents. Tryon promised these individual investors — consisting mostly of friends and family — lucrative opportunities to invest in deals, and the money they gave to Tryon was transferred to Weinstein through Optimus.

In February 2022, almost immediately after Tryon and Optimus started receiving investor money, Tryon was unable to pay its investors. Weinstein, Bromberg, and Wittels allegedly agreed with Tryon’s owners to pool money from existing investors of both Optimus and Tryon and use it to make monthly payments to other investors in a Ponzi-like fashion. Bromberg, Wittels and the Tryon owners falsely told investors the payments derived from legitimate investment returns, the documents say.

In late August 2022, Weinstein revealed his true identity to the Tryon owners in a secretly recorded meeting, according to the documents. In another recorded meeting the same month, he acknowledged misappropriating Tryon investor money and making various false statements about the purported Optimus deals, saying, “I finagled and Ponzied and lied to people to cover us.”

United States News

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Convicted fraudster who had sentence commuted by Trump is now facing new charges