Eliyahu Weinstein 88.
(photo credit: )
A New Jersey man is being investigated for stealing $200 million from Orthodox Jews in a phony real estate scam, allegedly using his connections within the closed-knit community to further his ends.
Police are investigating Eliyahu Weinstein, 35, who allegedly bilked millions from at least 14 wealthy investors across the United States and abroad, according to court documents obtained by The Jewish Week. Weinstein, 35, a member of Lakewood, N.J.'s Orthodox Jewish community, is alleged to have "orchestrated a fraudulent scheme" to dupe investors through his close ties to the community, court papers said.
According to one of the complaints, the entrepreneur and former used car salesman used his background as a yeshiva student - and member of a "yeshivish" family - to gain his victims' trust. Along with co-conspirators, he allegedly exploited the "belief that the tight-knit nature of the community assures that people within the community will deal with honesty and good faith toward each other."
The Jewish Week reported that 14 investors, almost all Orthodox Jews, filed complaints against Weinstein, alleging that he misappropriated their money for material gain. Weinstein, who has not been charged with any crimes, allegedly duped investors in New York, New Jersey, California and London as far back as 2005, according to a New Jersey federal grand jury subpoena.
One of the complaints claim he was "engaged in a criminal enterprise designed to steal sums of moneyâ€¦ by offering knowingly false representationsâ€¦ relating to the identity of various alleged investment properties, property values, ownership, debt, mortgage positions, and development status of property," The Jewish Week reported.
According to court papers, Weinstein also may have laundered money through a number of New York-area charities. A focus of the investigation will likely be several of those charities, where Weinstein allegedly made multimillion-dollar payments as a way to hide assets, according to the Newark, N.J.-based newspaper, The Star-Ledger. Ari Weisbrot, an attorney in Hackensack who is representing one of the investors, told The Star-Ledger that Weinstein's paper trail indicates an elaborate Ponzi scheme.
"There may be potentially legitimate explanations for those transfers," he said. "But in my opinion, they carry the scent of money laundering."
In depositions, Weinstein says the money was lost due to "market conditions." An attorney speaking on behalf of Weinstein, Gary Ginsburg, denied "all wrongdoing" in an interview with The Jewish Week.
"These were legitimate transactions," he said, adding that investors lost money in a down real estate market, not something more nefarious. He further said plaintiffs were using "innuendos" to force Weinstein into a "settlement."
But court papers from 2008 state otherwise: "Market conditions do not account for the fact that Plaintiff's money was not invested in or used for any ascertainable purpose. It is simply missing."
Among those Weinstein allegedly duped include Berish Berger of London, who lost $36.5 million and claims he was "fraudulently induced" to believe he was purchasing real estate in Philadelphia.
Harvey Wolinetz of Florida, alleges that Weinstein and his conspirators bilked him "of at least $79 million by making false representations that Plaintiffs would be provided with an interest in at least 12 different properties located in New Jersey, Florida, New York, Tennessee, Georgia and Pennsylvania."