Convicted Lakewood Ponzi schemer Weinstein, freed by Trump, charged with new fraud

NEWARK - The Lakewood Ponzi schemer who was freed from prison by former President Donald Trump after being twice convicted of fraud was charged Wednesday along with four other men, accused of committing new crimes, including conspiring to defraud investors of more than $35 million, and with conspiracy to obstruct justice, U.S. Attorney Philip R. Sellinger announced.

Eliyahu "Eli" Weinstein, 48; Aryeh “Ari” Bromberg, 49; and Joel Wittels, 57; all of Lakewood, along with Shlomo Erez, 55, a citizen and resident of Israel, and Alaa Hattab, 34, of Ottawa, Canada, were each charged with one count of wire fraud conspiracy and one count of conspiracy to obstruct justice, Sellinger said.

Weinstein, Bromberg and Erez were all arrested and scheduled to make their first appearances Wednesday before U.S. Magistrate Judge Tonianne Bongiovanni in Trenton federal court, according to Sellinger. Wittels and Hattab remain at large.

"These were brazen and sophisticated crimes that involved multiple conspirators and drew right from Weinstein’s playbook of fraud," Sellinger said. "No matter how many times someone attempts to prey on innocent investors, my office will dedicate whatever resources are necessary to root out and punish fraudsters."

See the full complaint at the bottom of this story.

Weinstein was convicted two times in federal court in New Jersey for defrauding investors. His first case involved a real estate Ponzi scheme that spanned from 2004 through 2011 and the second case stemmed from additional fraud he committed while on pretrial release in 2014, according to court documents.

These crimes resulted in approximately $230 million in combined losses to investors, and Weinstein was sentenced to 24 years in prison, followed by three years of supervised release, the documents said.

On Jan. 19, 2021, after Weinstein had served less than eight years, Trump on the day before his presidential term ended commuted Weinstein’s term to time served, eliminating the rest of his sentence.

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After his release, Weinstein began a new scheme to solicit money from investors through a company called Optimus Investments Inc., Sellinger said. Under the alias "Mike Konig," Weinstein ran Optimus with Bromberg and Wittels, who kept Weinstein's true identity hidden because, as Weinstein acknowledged in a secretly recorded conversation, investors wouldn’t give them “a penny” if they learned of Weinstein’s involvement.

Weinstein, Bromberg and Wittels received most of the investor money through a second company, Tryon Management Group LLC, which was owned and controlled by two other conspirators, according to court documents. Tryon promised these individual investors — consisting mostly of 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.

Posing as Konig, Weinstein provided the information for these supposed deals, and investors gave money to Tryon, believing the deals were legitimate and not knowing about Weinstein’s involvement. In turn, Tryon transferred those funds to Weinstein, through Optimus.

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'I finagled, and Ponzied and lied'

In February 2022, almost immediately after Tryon and Optimus started receiving investor money, Tryon was unable to pay its investors, Sellinger said. Instead of telling investors, Weinstein, Bromberg and Wittels 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 hid this arrangement from investors by falsely telling them the payments came from legitimate investment returns, not other investors’ money.

In late August 2022, Weinstein revealed his true identity to the Tryon owners in a secretly recorded meeting, Sellinger said. In another recorded August 2022 meeting, Weinstein admitted to embezzling Tryon investor money and making false statements about the alleged Optimus deals. Weinstein acknowledged that he was conducting a Ponzi scheme, stating, “I finagled, and Ponzied and lied to people to cover us,” Selinger said.

Erez claimed to be Weinstein’s attorney and helped conceal Weinstein’s true identity, partly by receiving and managing money on Weinstein’s behalf, the documents said. Hattab served as a broker for Optimus and helped conceal Weinstein’s involvement from investors and his business activities from the United States Probation Office.

When the Tryon owners learned that Konig was actually Weinstein, they agreed with the defendants to continue concealing Weinstein’s identity from investors and to raise additional money to pay off existing Tryon investors, all to stop the Ponzi scheme from falling apart and to cover up the fraud, the documents said.

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'I hid money. Get it?'

Additionally, Sellinger said the defendants also conspired to obstruct justice by helping to hide Weinstein’s assets that should have been used to pay over $200 million in restitution that he still owes his previous victims. The defendants also concealed Weinstein’s myriad business activities, which he was required to disclose to the court and which weren't allowed by the terms of his supervised release.

In multiple secretly recorded conversations, Weinstein discussed his intent to conceal his various assets from the government. During one conversation, Weinstein referenced hidden assets that he “can’t touch” while on supervised release because he’d otherwise “go to jail," then boasted, “I just told you something that no one in the world knows because I hid money. Get it?”

The wire fraud conspiracy charge is punishable by a maximum of 20 years in prison, according to Sellinger. The obstruction conspiracy charge is punishable by a maximum of five years in prison. Each count is also punishable by a maximum fine of either $250,000 or twice the gain or loss from the offense, whichever is greatest.

The U.S. Securities and Exchange Commission (SEC) also filed a civil complaint against Weinstein, Bromberg, Wittels, Hattab and two other individuals based on the same and additional conduct, according to the announcement.

WeinsteinEtAl.complaint by Asbury Park Press

Jenna Calderón covers breaking news and cold cases in Monmouth and Ocean counties. Before coming to the Press, she covered The Queen City for Cincinnati Magazine in Ohio. Contact her at 330-590-3903; jcalderon@gannettnj.com

This article originally appeared on Asbury Park Press: Convicted NJ Ponzi schemer Weinstein, freed by Trump, charged with new fraud