International Defendants Facing Charges in Multimillion-Dollar Fraud Scheme
Newark, N.J. – A New Jersey man, whose 24-year federal prison sentence was commuted after being twice convicted of defrauding investors of a total sum of $230 million, has been charged once again for committing additional crimes. The charges include conspiring to defraud investors of more than $35 million, as well as conspiracy to obstruct justice. U.S. Attorney Philip R. Sellinger announced the charges, stating that a criminal complaint was unsealed and that each of the five defendants, namely Eliyahu “Eli” Weinstein (also known as Mike Konig), Aryeh “Ari” Bromberg, Joel Wittels, Shlomo Erez, and Alaa Hattab, were charged with one count of wire fraud conspiracy and one count of conspiracy to obstruct justice.
Three of the defendants, Weinstein, Bromberg, and Wittels, were arrested and are scheduled to appear before U.S. Magistrate Judge Tonianne Bongiovanni in Trenton federal court. However, Wittels and Hattab remain at large. U.S. Attorney Sellinger emphasized the alleged sophisticated fraud scheme perpetrated by Weinstein and four other individuals, causing significant financial losses. The scheme involved using aliases and promising access to deals involving crucial medical supplies, baby formula, and first-aid kits for wartime Ukraine. Sellinger stated that these crimes were brazen and intricate, involving multiple parties and tactics that resembled Weinstein’s previous fraudulent activities.
The special agent in charge of the Newark FBI, James E. Dennehy, commended the investigative team for their diligent work in preventing further victimization and holding career criminals accountable. Dennehy remarked that Mr. Weinstein knowingly engaged in criminal activities, fully aware that they violated the terms of his previous release after being convicted of investment fraud. Dennehy’s statement also shed light on the tedious nature of investigating cases like this and how they ultimately serve to protect innocent individuals from falling prey to fraudsters.
Court documents revealed that Weinstein had previously been convicted on two occasions, once for a real estate Ponzi scheme and another for defrauding customers while on pretrial release. These crimes resulted in combined investor losses of approximately $230 million, leading to Weinstein’s original prison sentence of 24 years, followed by three years of supervised release. However, on January 19, 2021, after serving less than eight years, his sentence was commuted, leaving the remainder of his prison term intact.
Soon after his release, Weinstein began orchestrating a new scheme through a company called Optimus Investments Inc., alongside Bromberg and Wittels, using a fake identity, “Mike Konig,” to hide his true name. Investors, mostly friends and family, were promised lucrative opportunities related to COVID-19 masks, scarce baby formula, and first-aid kits bound for Ukraine. These investments were presented to the investors by Weinstein as Mike Konig. However, the funds were transferred to Weinstein through another company owned by conspirators, Tryon Management Group LLC.
The investigation discovered that Tryon was unable to fulfill its obligations to investors and, rather than disclosing this information, Weinstein, Bromberg, Wittels, and the Tryon owners agreed to use funds from existing investors to make monthly payments to other investors. To maintain the facade, Bromberg, Wittels, and the Tryon owners misled investors, falsely claiming that the payments derived from legitimate investment returns. In August 2022, Weinstein finally revealed his true identity to Tryon’s owners, acknowledging his involvement in misappropriating investor money and running a Ponzi scheme.
Two other defendants, Shlomo Erez and Alaa Hattab, were found to have played integral roles in concealing Weinstein’s true identity and business activities. Erez, claiming to be Weinstein’s attorney, assisted in managing his money and hiding his assets. Hattab, meanwhile, acted as a broker for Optimus, aiding in the concealment of Weinstein’s involvement from investors and his activities from the United States Probation Office.
Furthermore, the defendants are also charged with conspiracy to obstruct justice for their actions in hiding Weinstein’s assets that should have been used to pay over $200 million in restitution to his previous victims. Weinstein himself openly discussed his intention to hide assets from the government, admitting to concealing money that he could not touch while on supervised release to avoid jail time.
If convicted, the defendants face severe penalties, including maximum prison sentences of up to 20 years for wire fraud conspiracy and up to five years for conspiracy to obstruct justice. Additionally, each count carries a fine of up to $250,000 or twice the gain or loss from the offense, whichever is greater. The U.S. Securities and Exchange Commission (SEC) has also filed a civil complaint against Weinstein, Bromberg, Wittels, Hattab, and two other individuals based on similar conduct.
The charges and allegations outlined in the complaint are accusations, and the defendants are presumed innocent until proven guilty. Assistant U.S. Attorneys Jonathan Fayer and Emma Spiro of the Economic Crimes Unit in Newark are representing the government in this case. U.S. Attorney Sellinger expressed gratitude to the FBI and the Securities and Exchange Commission for their contributions to the investigation. The case has been assigned number 23-207. Defense counsel for Weinstein is Eric Creizman Esq., from New York, and Ricardo Solano Esq., from Newark, represents Bromberg.
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