2-Time NJ Ponzi Schemer Accused In New $35M Fraud After Trump Commuted Prison Sentence

TRENTON, NJ — A twice-convicted Ponzi schemer from Ocean County who stole $230 million from investors has been charged in yet another fraud scheme, this one costing investors $35 million, the U.S. Attorney's Office announced Wednesday.

Eliyahu "Eli" Weinstein, 48, whose 24-year prison sentence for 2013 and 2014 fraud convictions was commuted by President Donald Trump in January 2021, has been charged along with four other men in the scheme, which exploited shortages in baby formula and medical supplies, U.S. Attorney Philip R. Sellinger said.

Weinstein, of Lakewood, who used the alias Mike Konig, and four other men — Aryeh "Ari" Bromberg, 49, and Joel Wittels, 57, both of Lakewood; Shlomo Erez, 55, a citizen and resident of Israel, and Alaa Hattab, 34, of Ottowa, Canada — have been charged with one count each of wire fraud conspiracy and conspiracy to obstruct justice.

More than 150 people were defrauded in the new scheme, Sellinger said.

Weinstein, Bromberg and Erez were arrested and are scheduled to make their initial appearances Wednesday afternoon before U.S. Magistrate Judge Tonianne Bongiovanni in Trenton federal court; Wittels and Hattab remain at large.

Sellinger, in a news conference announcing the charges, said Weinstein "picked up right where he left off" when he was released from federal prison in 2021, when Trump commuted his sentence to time served, which amounted to less than 8 years.

Weinstein, who was on three years of supervised release, used a fake name and promised access to deals involving scarce medical supplies, baby formula, and first-aid kits supposedly destined for wartime Ukraine, Sellinger said.

"These were brazen and sophisticated crimes that involved multiple conspirators and drew right from Weinstein’s playbook of fraud," he 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."

According to the complaint, Weinstein orchestrated the scheme to solicit money from investors through a company called Optimus Investments Inc., which he ran using the name "Mike Konig," with Bromberg and Wittels. They kept Weinstein’s true name and 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, Sellinger said.

Weinstein, Bromberg, and Wittels received the bulk of investor money through a second company, Tryon Management Group LLC, which was owned and controlled by two other conspirators, the complaint alleges. 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, the complaint said.

Posing as Mike Konig, Weinstein provided the information for these supposed deals. Based on that information, 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, the complaint said.

In February 2022, almost immediately after Tryon and Optimus started receiving investor money, Tryon was unable to pay its investors. Rather than reveal this information to 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, according to the complaint.

Bromberg, Wittels, and the Tryon owners concealed this arrangement from investors by falsely telling investors that the payments derived from legitimate investment returns, not other investors’ money, the complaint said.

In late August 2022, Weinstein revealed his true identity to the Tryon owners, admitting in a secretly recorded meeting, "I am Eli Weinstein." In another recorded August 2022 meeting, Weinstein admitted to misappropriating Tryon investor money and making various false statements about the purported Optimus deals, according to the complaint.

"Weinstein acknowledged that he was conducting a Ponzi scheme, stating, 'I finagled, and Ponzied, and lied to people to cover us,' " the complaint said.

Erez claimed to be Weinstein’s attorney and helped conceal Weinstein’s true identity by, among other things, receiving and managing money on Weinstein’s behalf.. 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.

Weinstein concealed his identity and involvement in part because he was required to turn over any money he earned to the victims of his prior fraud, Sellinger said.

Once the Tryon owners learned that Mike Konig was actually Weinstein, they agreed 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, authorities said.

The conspiracy to obstruct justice charge stems from helping to hide Weinstein’s assets and business activities, authorities said.

Weinstein's assets should have been used to pay more than $200 million in restitution that he owes his previous victims, authorities said. Weinstein also was required to disclose to the court his business activities, which were expressly prohibited by the terms of his supervised release, Sellinger said.

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

"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," said James E. Dennehy, Special Agent in Charge of the Newark FBI. "I want to commend everyone who worked on this investigation. Cases like this can be tedious, and at times very frustrating, but the investigative team does the work to prevent more people from being victimized and to ensure career criminals face the justice they deserve."

Weinstein, Bromberg, Wittels, Hattab, and two other individuals also face a civil complaint filed against them by the U.S. Securities and Exchange Commission based on the same and additional conduct, authorities said.

In his prior schemes, Weinstein ran a real estate investment scheme that caused investors $200 million in losses, and while he was awaiting trial on those charges, ran a second scheme involving fake access to shares of Facebook as the company prepared its initial public stock offering.