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Two Men Charged in Scam Targeting Orthodox Jews
By CHAD BRAY
NEW YORK—Two men have been charged in an alleged $200 million real-estate fraud that targeted Orthodox Jews in four states and overseas, according to court documents.
Eliyahu Weinstein, who represented himself as a real-estate investor based in New Jersey, allegedly exploited the social and business customs of the Orthodox Jewish community to carry out the scheme, according to a criminal complaint made public Thursday. The scam allegedly began in September 2005.
Mr. Weinstein and Vladimir Siforov, of New York, have been charged with fraud in the matter. They're expected to appear in federal court in Newark later Thursday.
Some of his victims' money was used by Mr. Weinstein to amass a substantial collection of art, jewelry and Judaica, prosecutors from the U.S. Attorney's office in Newark alleged in the criminal complaint.
The collection includes manuscripts and antique Judaica items worth about $6.2 million; a jewelry and clock collection that Mr. Weinstein allegedly spent $7.6 million to acquire; jewelry and watches valued at $6.2 million, including items from Bulgari, Cartier, Omega and Harry Winston, according to the complaint. The items are stored in New Jersey, New York, Florida, Israel and other places, prosecutors said.
In a criminal complaint, prosecutors alleged Mr. Weinstein would use his contacts in the Jewish community to meet potential investors and falsely represented he owns or could purchase properties. Many of the victims were from New Jersey, New York, Florida, California and overseas, prosecutors said.
He often claimed to investors that he had another party lined up to buy or rent the property and they could earn a healthy profit in a short period, according to the complaint. The "buyers" were actually other members of the scheme, prosecutors said.
When investors tried to collect earnings from their investments, Mr. Weinstein allegedly ignored them, made promises to pay or paid a smaller amount, according to the complaint.
In one instance, Mr. Weinstein allegedly defrauded a Chicago bank out of $6 million related to the purchase of a property in the Bushwick section of Brooklyn, prosecutors said.
In another instance, Mr. Weinstein and Mr. Siforov allegedly defrauded a victim in the U.K. out of $4.8 million by claiming Mr. Siforov owned a company that was preparing to buy the same Brooklyn property from a company controlled by Mr. Weinstein for $16.2 million, prosecutors said.
Mr. Weinstein allegedly maintained multiple passports and told one investor: "if I want to run away, I can," according to the complaint.
http://online.wsj.com/article/SB100...602518.html?mod=WSJ_business_IndustryNews_DLW
Two Men Charged in Scam Targeting Orthodox Jews
By CHAD BRAY
NEW YORK—Two men have been charged in an alleged $200 million real-estate fraud that targeted Orthodox Jews in four states and overseas, according to court documents.
Eliyahu Weinstein, who represented himself as a real-estate investor based in New Jersey, allegedly exploited the social and business customs of the Orthodox Jewish community to carry out the scheme, according to a criminal complaint made public Thursday. The scam allegedly began in September 2005.
Mr. Weinstein and Vladimir Siforov, of New York, have been charged with fraud in the matter. They're expected to appear in federal court in Newark later Thursday.
Some of his victims' money was used by Mr. Weinstein to amass a substantial collection of art, jewelry and Judaica, prosecutors from the U.S. Attorney's office in Newark alleged in the criminal complaint.
The collection includes manuscripts and antique Judaica items worth about $6.2 million; a jewelry and clock collection that Mr. Weinstein allegedly spent $7.6 million to acquire; jewelry and watches valued at $6.2 million, including items from Bulgari, Cartier, Omega and Harry Winston, according to the complaint. The items are stored in New Jersey, New York, Florida, Israel and other places, prosecutors said.
In a criminal complaint, prosecutors alleged Mr. Weinstein would use his contacts in the Jewish community to meet potential investors and falsely represented he owns or could purchase properties. Many of the victims were from New Jersey, New York, Florida, California and overseas, prosecutors said.
He often claimed to investors that he had another party lined up to buy or rent the property and they could earn a healthy profit in a short period, according to the complaint. The "buyers" were actually other members of the scheme, prosecutors said.
When investors tried to collect earnings from their investments, Mr. Weinstein allegedly ignored them, made promises to pay or paid a smaller amount, according to the complaint.
In one instance, Mr. Weinstein allegedly defrauded a Chicago bank out of $6 million related to the purchase of a property in the Bushwick section of Brooklyn, prosecutors said.
In another instance, Mr. Weinstein and Mr. Siforov allegedly defrauded a victim in the U.K. out of $4.8 million by claiming Mr. Siforov owned a company that was preparing to buy the same Brooklyn property from a company controlled by Mr. Weinstein for $16.2 million, prosecutors said.
Mr. Weinstein allegedly maintained multiple passports and told one investor: "if I want to run away, I can," according to the complaint.
http://online.wsj.com/article/SB100...602518.html?mod=WSJ_business_IndustryNews_DLW
