Lakewood Ponzi schemer Eliyahu Weinstein gets 22 years in jail

TRENTON – Admitted Ponzi schemer Eliyahu Weinstein of Lakewood was sentenced Tuesday to 22 years in prison for running a real-estate scam that cost investors more than $200 million in losses.

U.S. District Judge Joel A. Pisano, sitting in Trenton, imposed the federal prison term on Weinstein, 38, for two counts of conspiracy to commit wire fraud and one count of money laundering.

Pisano ordered Weinstein to pay $215.4 million in restitution to his victims and forfeit another $215.4 million to the government. The judge found that the defendant is capable of paying $1,000 a month toward those amounts.

Pisano also ordered that Weinstein be put on supervised release for three years after he completes his prison sentence.

Weinstein, also known as Eli Weinstein, Edward Weinstein and Eddie Weinstein, admitted to the charges on Jan. 3, 2013.

Authorities alleged that Weinstein ran a real-estate investment scam from June 2004 through August 2011, using false and misleading statements to induce victims to invest.

Orthodox targeted

Weinstein initially targeted victims from the Orthodox Jewish community to which he belonged, exploiting his standing in and knowledge of the customs and practices of the community to further the scheme. He abused the community’s practice of engaging in transactions based on trust — without paperwork — to obtain money from victims without substantial records, authorities said.

Among Weinstein’s misstatements to investors were that he had inside access to certain real estate opportunities that allowed him to buy a particular piece of property below market price. He also told victims their money would be used to buy a specific property that would then be quickly resold or flipped to another purchaser whom he had lined up.

The lies were bolstered by fraudulent documents, including phony mortgages and deeds, and “show checks,” or forged instruments that had been negotiated for smaller amounts and then altered to appear as if they were worth millions of dollars, authorities said.

Throughout the scheme, Weinstein would lie to investors, telling them their money was used to purchase property, and that the profits were being rolled into new investments, authorities said.

Weinstein used a portion of the proceeds to fund charitable and religious contributions, to boost his reputation within the Orthodox Jewish community.

Tarnished image

By 2010, when his reputation was tarnished in the Orthodox community due to massive losses caused by the scheme, Weinstein and accomplices turned to others outside the community, whom they defrauded out of millions of dollars more, authorities said.

Authorities said Weinstein used the proceeds of his fraud to fund a lavish lifestyle, which included gambling in Las Vegas and elsewhere, leasing luxury cars, buying millions of dollars’ worth of jewelry, watches and antique, Jewish ceremonial art, and paying off millions of dollars in credit-card bills and legal expenses.

An accomplice, Vladimir Siforov, is charged with wire fraud and remains a fugitive, authorities said.

Weinstein and two other men still have charges pending against them related to what authorities described as a stock scam that swindled a New Zealand man out of more than $6 million. In that case, federal authorities allege that Weinstein, Alex Schleider, 48, of Lakewood, and Aaron Muschel, 64, of Brooklyn misrepresented that the man’s investment would be used to buy real estate and shares in Facebook’s IPO in 2012. They are expected back in court in that case sometime in April.

Kathleen Hopkins: 732-643-4202; Khopkins@app.com