— Eliyahu "Eli" Weinstein, charged with ripping off members of his Orthodox Jewish community from New Jersey to Israel in a $200 million real estate investment scheme, was ordered jailed without bail by a federal judge in Newark this afternoon after federal prosecutors argued that he is a flight risk.
Arrested by federal agents early this morning at his Lakewood home on bank and wire fraud charges, the 35-year-old former used car salesman sat silently, his hands cuffed, throughout most of his first hearing before U.S. Magistrate Judge Esther Salas. His attorney, Ephraim Savitt, denied the charges against Weinstein, contending the case rose from disgruntled former partners who are already suing him over investment losses.
But assistant United States Attorneys Mark E. Coyne and Zach Intrater argued that the evidence against him is overwhelming and urged Salas to order him detained, contending he made nine trips abroad this year, including a trip to Israel last week, and poses a flight risk.
"The defendant could get a 50-year prison sentence," Coyne added.
Salas ordered Weinstein detained, but agreed to Savitt's request for a bail hearing next week, where the defense lawyer said family and friends of Weinstein will be ready to post whatever assets they have to support any release bond. He said Weinstein has a wife, who was in court, and six young children, and has not fled the country despite knowing an FBI probe was ongoing.
Vladimir Siforov, 43, of Manalapan, named in the complaint filed against Weinstein as a partner in the alleged scheme, remains at large, according to the FBI.
Federal authorities contend Weinstein, Siforov and others preyed since 2005 on members of the tightly-knit Orthodox Jewish community throughout the world, many of whom had known each other since childhood, capitalizing on their social and religious bonds to be introduced to more and more victims. The charges contend he duped investors to buy into bogus property ventures, in part, by overstating their value and misrepresenting the extent of his ownership interests in the properties.
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“Weinstein is charged with offering an array of lucrative investment opportunities that served the single purpose of fattening his wallet," said U.S. Attorney Paul J. Fishman. "It is always offensive when someone steals from others to finance his own luxurious lifestyle, but it is especially galling to exploit a community with whom one shares an inherent trust.”
Weinstein already faces millions of dollars in outstanding judgments in a string of civil lawsuits over real estate transactions — lawsuits that Savitt called the "wellsprings" of the federal criminal charges. Records reviewed by The Star-Ledger also show that he was tied into at least one real estate deal with Solomon Dwek, the government informant behind a massive, high-profile federal sting that led to the arrests of more than 40 politicians and religious figures last summer.
The federal charges against Weinstein claim he never owned many of the properties he claimed to own and that he repeatedly sold his fake and real interests multiple times. Weinstein also drew up fraudulent leases, according to the charges, to entice people to invest in some properties by making it appear it had substantial rental income, when there was no tenant and no income. Federal authorities also claim he hid material information, such as zoning changes on the investment properties that would dramatically reduce their value.
The civil litigation by many of his former partners accuse him of being a scam artist. Florida real-estate mogul Harvey Wolinetz charged that Weinstein took nearly $80 million of his money involving the purchase of properties in New Jersey, Florida, New York, Tennessee, Georgia and Pennsylvania.
In a civil complaint filed in federal court, his attorneys charged that Weinstein, "engaged in a brilliant but diabolical pyramid scheme," that "forged or created multiple deeds, transfer documents, corporate documents and other financial records, and convinced his "investors" to loan or invest hundreds of millions of dollars to acquire interests in properties" that were never actually purchased.