A twice-convicted New Jersey con artist whose 24-year federal prison sentence was commuted was charged today with four other men for committing additional crimes, including conspiring to defraud investors of more than $35 million, and with conspiracy to obstruct justice
Eliyahu “Eli” Weinstein, aka Mike Konig, 48, whose 24-year prison sentence for 2013 and 2014 fraud convictions was commuted by then-President Donald Trump in January 2021, has been charged with four other defendants, each facing one count of wire fraud conspiracy and one count of conspiracy to obstruct justice.
Weinstein was convicted twice in federal court for defrauding investors. His first case involved a real estate Ponzi scheme that spanned from 2004 through 2011 and the second case stemmed from additional fraud he committed while on pretrial release in 2014, according to court documents.
Weinstein’s co-defendants are Aryeh “Ari” Bromberg, 49, and Joel Wittels, 57, all of Lakewood, New Jersey, along with Shlomo Erez, 55, a citizen and resident of Israel, and Alaa Hattab, 34, of Otttowa, Canada. The three defendants who were arrested are scheduled to make their initial appearances today before U.S. Magistrate Judge Tonianne Bongiovanni in Trenton federal court; Wittels and Hattab remain at large.
Weinstein, 48, whose 24-year prison sentence for 2013 and 2014 fraud convictions was commuted by President Donald Trump in January 2021, after being convicted of defrauding investors of a total of $230 million.
Rep. Jeff Van Drew, who had been elected as a Democrat before he switched parties and became a Republican, also supported Weinstein’s release.
“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,” said Sellinger. “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.”
“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.”
Sellinger said that soon after being released from prison, Weinstein began orchestrating a new scheme to solicit money from investors through a company called Optimus Investments Inc. (Optimus).
Using the fake name “Mike Konig,” Weinstein ran Optimus 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. 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.
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.
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.
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.
Bromberg, Wittels, and the Tryon owners concealed this arrangement from investors by falsely telling investors that the payments were derived from legitimate investment returns, not other investors’ money.
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.
Weinstein acknowledged that he was conducting a Ponzi scheme, stating, “I finagled, and Ponzied, and lied to people to cover us.”
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.
Once the Tryon owners learned that Mike Konig was actually Weinstein, they agreed with the defendants 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. In addition to defrauding investors, the defendants also conspired to obstruct justice.
They helped hide Weinstein’s assets that should have been used to pay over $200 million in restitution that he still owes his previous victims. The defendants also concealed Weinstein’s myriad business activities, which he was required to disclose to the court and which were expressly prohibited by the terms of his supervised release.
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?”
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.