Instagram star Jay Mazini’s victims are owed millions. Will they get paid anything?

When Instagram star Jay Mazini convinced investors to send him money in a bitcoin scheme, he told them he was worth $33 million. In fact, he had $162 in his bank account at the time, federal investigators said.

Now that he has pleaded guilty to federal fraud charges, Mazini’s victims want to know how they will be paid the millions of dollars they are owed in restitution for schemes involving bitcoin and a halal investment company.

“I pray there is an investigator out there that can turn over every rock and really dig into it and find the money he took,” said Waleed Suleiman, who put $400,000 into a Mazini company that promised halal, or Quran-compliant, investment and high returns.

Mazini, whose real name is Jebara Igbara, pleaded guilty in federal court in November to wire fraud, conspiracy to commit wire fraud and money laundering. He was ordered to pay $5.12 million in restitution for the bitcoin scheme and another $5.1 million in forfeiture.

He also is expected to pay millions more in restitution in connection with the Halal Capital charges. The sum will be determined at his sentencing hearing, which has not yet been scheduled.

Under U.S. law, restitution is mandatory for each victim in the full amount of their losses, said John Marzulli, a spokesman for the U.S. Attorney’s Office in the Eastern District of New York.

The reality is that victims often do not receive full payment, or any payment at all, say the U.S. Department of Justice and legal experts.

Two decades to pay up

Mazini rose to fame posting videos of himself handing out large amounts of cash to strangers and appearing with famous rappers, including 50 Cent and Fabolous, in giveaway videos. He doled out financial and spiritual advice to nearly a million Instagram followers.

He spun this fame to grow his Mazini Italy clothing line, an online stock trading academy, a halal investment company and a bitcoin buying spree — all of which came crashing down after buyers accused him of running scams.

The Securities and Exchange Commission identified four people who lost $5 million in a bitcoin scheme, in which Mazini told online followers he would pay above-market prices for bitcoin and then sent forged wire transfer confirmations instead of payment.

They also found more than a dozen Halal Capital victims who lost $8 million combined. That number is expected to grow as new victims come forward before sentencing. They include Suleiman and his co-plaintiffs who filed a lawsuit against Mazini and his former partner, Noor Rabah.

“If the defendant does not have assets to pay restitution at time of sentencing, it becomes a judgment imposed against them and they will owe that sum until it is fully repaid,” Marzulli said in an email.

Restitution payment plans depend on the defendant’s resources and whether he supports children or family, according to the U.S. Attorney’s Office. Mazini is married and has a son. Convicted offenders typically will have wages garnished, or, if they are in prison, a percentage of what they earn there will go toward restitution. Prisoners typically earn between 13 and 52 cents per hour, according to a American Civil Liberties Union report.

Restitution judgments are enforced for 20 years after a prison term and can act as a lien against any property or assets the defendant has or will have in the future.

Full restitution is 'rare,' officials warn

The Department of Justice warns online that “the chance of full recovery is very low,” since many defendants “will not have sufficient assets to repay their victims.”

“While defendants may make partial payments toward the full restitution owed, it is rare that defendants are able to fully pay the entire restitution amount owed,” the department says. “If and when the defendant pays, you most likely will receive a number of small payments over a long period of time.”

Suleiman, who had a signed promissory note for his $400,000 investment, has sent evidence to federal agencies to support his claim for restitution.

His lawsuit, with seven other plaintiffs and a mosque, is still pending in New York State Supreme Court in Brooklyn. They say they are owed close to $5 million combined, as well as attorney’s fees and damages.

“It’s concerning,” Suleiman said. “We’ve invested a lot of money into lawyers and the lawsuit. We look forward to him paying back everything he owes.”

Previous reporting:

He found fame on social media: Did Influencer Jay Mazini use that to swindle millions?

He netted millions: Did Jay Mazini pull off the 'biggest Ponzi scheme in any Muslim community in the US?'

Instagram influencer Jay Mazini: 'I'm not what everybody portrays me as'

In Ponzi schemes, the government usually does not hear about fraud until people stop getting paid — and at that point there may be nothing left, said Ryan O’Neill, a partner who handles white-collar criminal defense and investigations at the Riker Danzig law firm.

In sentencing, a judge will consider whether the defendant shows remorse and whether he has taken steps to reimburse the victim for their financial losses. The defendant will disclose their assets when negotiating a plea, but federal investigators “almost always know the answer” at that point, O’Neill said.

“There’s a duty under the law, but you can’t get blood from a stone, and victims are usually left with absolutely nothing, which is why these crimes are prosecuted so aggressively, because usually it’s gone,” said O’Neill, a former assistant U.S. attorney for the District of New Jersey.

Victims still want the courts to hear about the impact on their lives, and they want to submit their claim.

“It usually has less to do with getting their money back and more to do with making sure this person serves the time they think they should,” O’Neill said.

Mustapha Ndanusa, Suleiman’s lawyer in the lawsuit, hopes that federal investigators uncover funding sources that could help his clients.

“I can’t imagine they had a guilty plea with Jay Mazini, with him agreeing to restitution, without knowing how much he has, or that he has money,” he said.

This article originally appeared on NorthJersey.com: Jay Mazini: Instagram star's bitcoin victims want money back