“I have a bad reputation,” Eliyahu Weinstein was recorded telling others charged in what authorities alleged was a $35 million Ponzi-like scheme, officials say.
A New Jersey con man with a “bad reputation” who was pardoned two years ago by former President Donald Trump has been arrested again and accused of defrauding investors out of millions of dollars.
Eliyahu “Eli” Weinstein and four other men are charged with fleecing more than 150 people out of $35 million in a “Ponzi-like scheme,” according to an arrest complaint unsealed Wednesday in federal court in Trenton and a statement from the office of the U.S. attorney for New Jersey.
Using the alias Michael Konig, Weinstein and the others formed a company called Optimus Investments Inc. and allegedly began “orchestrating another substantial scheme to defraud investors” shortly after he was released from prison in January 2021 — but still on probation, the complaint says.
“We allege Mr. Weinstein took part in a new scheme to rip off investors by hiding his real identity,” Special Agent in Charge James E. Dennehy of the FBI’s Newark field office said in the Justice Department statement. “He was aware his actions were against the terms of his release on a previous investment fraud conviction, and we allege he engaged in criminal activity anyway.”
The group is accused of “falsely claiming” it had “lucrative deals” on N95 Covid masks, “scarce baby formula” and “first-aid kits bound for Ukraine.”
Officials say the men also conspired to hide Weinstein’s assets “that should have been used to pay over $200 million in restitution” he owes the victims of his previous Ponzi scheme.
Prosecutors say investigators obtained “surreptitious audio” recordings of meetings Weinstein attended with his alleged accomplices and two unidentified co-conspirators, starting Aug. 26, during which he allegedly admitted that he was using the Konig alias “because I have a bad reputation.”
Weinstein, 48, along with Aryeh Bromberg, 49, Joel Wittels, 57, Shlomo Erez, 55, and Alaa Hattab, 34, are charged with conspiracy to commit wire fraud and conspiracy to obstruct justice, the complaint says.
If they are convicted on both charges, the five men each face a maximum of 25 years in prison and fines of “either $250,000 or twice the gain or loss from the offense, whichever is greatest,” according to the Justice Department statement.
All but Wittels, who, like Weinstein and Bromberg, lives in Lakewood, New Jersey, and Hattab, who lives in Ottawa, have been arrested, according to the statement. Erez lives in Israel.
The alleged unidentified co-conspirators, who ran a company called Tryon Management Group and initially were not aware that Weinstein was Konig, have not been charged, according to the complaint.
“Once the Tryon owners learned that Mike 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 in an effort to stop the Ponzi scheme from falling apart and to cover up the fraud,” the statement said.
The Securities and Exchange Commission has also filed a civil complaint against Weinstein.
Weinstein was one of 74 people who received pardons from Trump in the final hours of his presidency in January 2021.
The group included Trump’s former chief strategist, Steve Bannon, former Republican National Committee finance chair Elliott Brody, Dwayne Michael Carter Jr. (aka rapper Lil Wayne) and Albert J. Pirro Jr., the ex-husband of Fox News host Jeanine Pirro.
Weinstein had, at that point, served eight years of a 24-year sentence for his role in a $200 million real estate Ponzi scheme that preyed on fellow members of the Orthodox Jewish community in Lakewood, where he lives.
His commutation was supported by, among others, Brett Tolman, the former U.S. attorney for Utah; former Rep. Bob Barr, R-Ga.; and defense attorney Alan Dershowitz.
At the time, then-New Jersey Attorney General Gurbir Grewal condemned Trump’s decision to pardon Weinstein.
“I’m disgusted,” said Grewal, who had helped prosecute Weinstein. “It’s no surprise that President Trump granted clemency to Eli Weinstein: It’s one huckster commuting the sentence of another.”