A New Jersey man who had his prison sentence commuted by then-President Donald Trump was charged on Wednesday in a new, sophisticated fraud scheme that included falsely promising deals to send supplies to Ukraine.
The U.S. Attorney’s Office in New Jersey charged Eliyahu Weinstein and four others in a plan that allegedly cost investors millions of dollars. In addition to Weinstein, 48, of Lakewood, the office charged Aryeh “Ari” Bromberg, 49, and Joel Wittels, 57, also of Lakewood; Shlomo Erez, 55, a citizen and resident of Israel; and Alaa Hattab, 34, of Ottawa, Canada. They were each charged with one count of wire fraud conspiracy and one count of conspiracy to obstruct justice.
Weinstein had been serving a lengthy prison sentence for being convicted in two cases — a Ponzi scheme and real estate fraud — that led to more than $230 million in investor losses when Trump commuted his sentence in January 2021. His release was part of a wave of clemency actions by Trump that included commuting the sentence of Salomon Melgen, a Florida eye doctor and major donor to U.S. Sen. Bob Menendez, and pardoning George Gilmore, New Jersey’s powerful Ocean County Republican chair.
Weinstein’s shortened sentence also had the support of U.S. Rep. Jeff Van Drew (R-N.J.), who did not immediately return a call seeking comment.
But two years after Weinstein’s release, prosecutors say Weinstein hasn’t changed.
“As alleged in the complaint, Weinstein, along with four other individuals, has once again perpetrated a sophisticated fraud scheme causing losses of millions of dollars,” U.S. Attorney Philip Sellinger said in a statement. “He did so by using a fake name and falsely promising 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.”
Soon after he was released from prison, prosecutors say, Weinstein started orchestrating a new scheme to solicit money from investors through a company called Optimus Investments Inc. He ran the company under a fake name, Mike Konig, along with Bromberg and Wittels. They kept Weinstein’s real name hidden because investors otherwise wouldn’t give “a penny,” Weinstein said in a secretly recorded conversation.
The three men then received the bulk of investor money through another company, Tryon Management Group LLC, managed by two other unnamed conspirators, according to the U.S. Attorney’s office.
Tryon promised investors — mostly friends and family — lucrative opportunities to invest in deals involving Covid-19 masks, scarce baby formula and first-aid kits supposedly bound for wartime Ukraine, the office said. As Mike Konig, Weinstein provided the information for these supposed deals, and investors gave money to Tryon based on that information. Tryon then transferred those funds to Weinstein through Optimus, the office said.
But Tryon was unable to pay its investors almost immediately, according to prosecutors. They said Weinstein, Bromberg, and Wittels agreed to pool money from existing investors in both companies to make payments to other investors in a “Ponzi-like fashion,” the office said.
Then, in a secretly recorded meeting months later, Weinstein revealed his true identity to the Tryon owners, according to the office.
“I finagled, and Ponzied, and lied to people to cover us,” Weinstein said.
In an attempt to keep the scheme from falling apart, prosecutors said the Tryon owners tried to keep Weinstein’s true identity from investors and to raise more money to pay off existing investors.
Meanwhile, Erez allegedly claimed to be Weinstein’s attorney and helped conceal his identity by handling Weinstein’s money. Hattab allegedly served as a broker for Optimus and helped conceal Weinstein’s involvement from investors and his business activities from the U.S. Probation Office.
The men charged also helped hide Weinstein’s assets that should have been used to pay over $200 million in restitution he owes past victims, according to the U.S. Attorney’s Office. They concealed Weinstein’s “myriad” business activities, which were prohibited under the terms of his release.
In multiple secretly recorded conversations, Weinstein discussed his intent to conceal his various assets from the government, according to the office. In one conversation, the office said, Weinstein referenced hidden assets that he “can’t touch” while on supervised release because he’d otherwise “go to jail.” He then said, “I just told you something that no one in the world knows because I hid money. Get it?”
The office of the attorney for Weinstein is closed and not accepting phone calls. An attorney for Bromberg didn’t immediately respond to a message seeking comment. The U.S. Attorney’s Office didn’t list attorneys for the other men who were charged.
The wire fraud conspiracy charge is punishable by a maximum of 20 years in prison, and the obstruction conspiracy charge is punishable by a maximum of five years.
The U.S. Securities and Exchange Commission also filed a civil complaint against Weinstein, Bromberg, Wittels, Hattab, and two other individuals.
Sam Sutton contributed to this article.