LAKEWOOD – A local man who was recently released from prison for an investor fraud scheme has been charged alongside four others for trying to defraud different investors of more than $35 million.
This particular scheme involved distributing masks and other important equipment over to wartorn Ukraine, police said.
The following were charged with one count each of wire fraud conspiracy and conspiracy to obstruct justice: Eliyahu “Eli” Weinstein, aka Mike Konig, 48; Aryeh “Ari” Bromberg, 49; and Joel Wittels, 57; all of Lakewood, along with Shlomo Erez, 55, a citizen and resident of Israel; and Alaa Hattab, 34, of Ottowa, Canada.
“As alleged in the complaint, Weinstein, along with four other individuals, has once again perpetrated a sophisticated fraud scheme causing losses of millions of dollars,” said U.S. Attorney Philip R. Sellinger. “He did so by using a fake name and falsely promising access to deals involving scarce medical supplies, baby formula, and first-aid kits supposedly destined for wartime Ukraine. These were brazen and sophisticated crimes that involved multiple conspirators and drew right from Weinstein’s playbook of fraud. 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.”
Weinstein was a free man due to having his previous sentence commuted by then-President Donald Trump.
Prosecutors allege that soon after Trump released him from prison, Weinstein created a new company called Optimus Investments, Inc. Using the fake name “Mike Konig,” he ran the company with Bromberg and Wittels.
The three men received most of their investor money from another company, Tryon Management Group, LLC, which was owned and controlled by Erez and Hattab.
Tryon’s investors were mostly friends and family. They were offered lucrative deals involving COVID-19 masks, baby formula, and first aid kits that were supposedly being shipped to Ukraine.
These investors believed this was a legitimate investment. They were hoping to profit off selling life-saving materials to families in a wartorn area.
The investors gave money to Tryon and Tryon gave it to Optimus. However, in February of 2022, almost immediately after the companies started getting investor money, it started to fall apart, police said. Tryon was unable to pay its investors back.
To hide this fact, the men created a Ponzi scheme. 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, police said.
In August of 2022, Weinstein revealed his true identity to the Tryon owners, admitting in a secretly recorded meeting, “I am Eli Weinstein.” Police said that in another recorded August 2022 meeting, Weinstein admitted to misappropriating Tryon investor money and making various false statements about the purported Optimus deals. Weinstein was recorded as saying “I finagled, and Ponzied, and lied to people to cover us.”
Once Tryon’s owners learned they were actually dealing with Weinstein, they still continued the scheme to keep it from falling apart and to cover up the fraud, police 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, police said. 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.
The obstruction of justice charge comes from the fact that Weinstein still owes more than $200 million in restitution. His income should have been reported so that a portion could go toward the money he owed.
In multiple secretly recorded conversations, police said Weinstein discussed his intent to conceal his various assets from the government. He referenced hidden assets that he “can’t touch” while on supervised release because he’d otherwise “go to jail.” Weinstein allegedly said “I just told you something that no one in the world knows because I hid money. Get it?”
The wire fraud conspiracy charge is punishable by a maximum of 20 years in prison. The obstruction conspiracy charge is punishable by a maximum of five years in prison. Each count is also punishable by a maximum fine of either $250,000 or twice the gain or loss from the offense, whichever is greatest.
The U.S. Securities and Exchange Commission (SEC) also filed a civil complaint against Weinstein, Bromberg, Wittels, Hattab, and two other individuals based on the same and additional conduct.
“We allege Mr. Weinstein took part in a new scheme to rip off investors by hiding his real identity,” Special in Charge James E. Dennehy of the Newark FBI said. “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. 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.”
Past Crimes
Weinstein was originally caught performing elaborate Ponzi and real estate schemes creating combined losses to investors of approximately $200 million. He was sentenced to 22 years in prison.
While under indictment and on pretrial release, he was involved in another scheme regarding real estate fraud. He was then sentenced another two years.
He was ordered to pay back his investors.
Sentence Commuted By Trump
Weinstein was supposed to serve 24 years in prison but his sentence was commuted by Trump. This was during the last days of his presidency, when dozens of people who had access to Trump, such as Ocean County GOP leader George Gilmore, were pardoned or had their sentences commuted.
The press secretary statement at the time of the commuting was as follows: “President Trump commuted the sentence of Eliyahu Weinstein. This commutation is supported by former U.S. Attorney Brett Tolman, former Representative Bob Barr, former U.S. Attorney Joseph Whittle, Professor Alan Dershowitz, Representative Mark Walker, Representative Scott Perry, Representative Jeff Van Drew, Jessica Jackson of the Reform Alliance, The Tzedek Association, Dr. Danny Feuer, and numerous victims who have written in support. Mr. Weinstein is the father of seven children and a loving husband. He is currently serving his eighth year of a 24-year sentence for a real estate investment fraud and has maintained an exemplary prison history. Upon his release, he will have strong support from his community and members of his faith.”
In a video provided to The Lakewood Scoop after his release, Weinstein thanked the president and Ivanka Trump for their support of him. He also thanked his victims for the letters of support they wrote showing their compassion in giving him a second chance.
“The goal is to make everybody proud of me and to lead my life in the proper fashion,” he said in 2021.
When news of his clemency was spread, former New Jersey Attorney General Gurbir S. Grewal posted on his personal Twitter: “I’m disgusted. It’s no surprise that President Trump granted clemency to Eli Weinstein: it’s one huckster commuting the sentence of another. Both men have consumed far more of my professional life than I ever wanted, and I’m not going to spend more time thinking about them now.”
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