Shackled in handcuffs and leg irons, Eliyahu Weinstein, the Lakewood real estate developer charged Thursday by federal agents with having “masterminded” a $200 million scheme to defraud his investors, listened in federal court as an assistant U.S. attorney detailed charges that could net him more than 50 years in prison.
At the conclusion of his first appearance, U.S. District Magistrate Judge Esther Salas denied bail for Weinstein after an assistant U.S. Attorney told her the government considers Weinstein a serious flight risk.
A bail hearing has been tentatively scheduled for Tuesday.
One count against Weinstein alleges he schemed to defraud a Chicago bank identified only as “Bank A” in the complaint; a second count accuses him and co-defendant Vladimir Siforov of Manalapan of a scam against a person identified as M.F.
The court appearance ended a day that began in the early morning for the developer when Weinstein was arrested by federal agents at his Lakewood home on charges of defrauding investors of hundreds of millions of dollars as part of a Ponzi scheme.
He already has been charged in civil suits with bilking investors on two continents out of nearly $300 million. Just last week a U.S. District Court judge in Pennsylvania issued a $34 million judgment against Weinstein and some associates.
One investor has likened Weinstein, 35, to the next Bernie Madoff, according to court documents. Madoff, of New York, admitted to turning his wealth management business into a massive Ponzi scheme that defrauded thousands of investors of billions of dollars.
Others say in court documents that Weinstein left them and their families broke. And one lawyer claimed in federal court that Weinstein funneled about $140 million to charities and unrelated corporations.
Weinstein has claimed in court papers that he lost the investors’ money when the real estate market tumbled.
The criminal complaint against him states that Weinstein maintained multiple passports. Weinstein, the complaint concludes, showed a passport to one of his “victim-investors” and said, “if I want to run away, I can.”
The complaint also stated that Weinstein used some of his victims’ money to buy a large collection of jewelry, art and Judaica, including manuscripts and antiques worth more than $6 million. Weinstein also had jewelry and clock collections worth $7.6 million, and more jewelry and watches — from jewelers such as Breguet, Bulgari and Cartier — worth $6.2 million.
“Overwhelming” evidence
Appearing in court wearing a gray pinstriped suit jacket and pants, and a white striped shirt, Weinstein quietly answered “yes” when Salas asked him if he understood his rights as she explained them to him, and if he had retained an attorney.
Assistant U.S. Attorney Mark E. Coyne said Weinstein is facing up to 50 years in prison and up to $400 million in fines on the two counts against him.
“The exposure he is facing is off the charts,” he told Salas. “The weight of evidence against him is nothing short of overwhelming.”
Coyne also noted that Weinstein “frequently” travels around the world to places such as Israel, Ukraine and Poland.
Weinstein’s attorney, Ephraim Savitt, argued that Weinstein is not a flight risk and is trying to work out settlements with his creditors.
“His only home is in New Jersey with his wife and his six very young children,” Savitt said. “If he wanted to flee, he would have gone long ago.”
Savitt said Weinstein went to Israel last week “on business and for a wedding.”
The criminal complaint filed against Weinstein and Siforov alleges that Weinstein played off his connections to the Orthodox Jewish community, exploiting the community’s “social and business customs and practices” to bilk numerous clients out of millions of dollars.
Natalia Nikiforova, 37, who said she is Siforov’s wife, still was at Siforov’s sprawling Summer Drive home in Manalapan with the couple’s 4-year-old twins Thursday. She said her husband left for Moscow on business last week, though she was vague on the details of that business.
Nikiforova said she’d been in touch with her husband since FBI raided the home early Thursday morning, and he denied the charges, saying he “never, ever did anything to get somebody’s penny for (his) own pocket.”
She said the home, where the couple has lived for four years, is now in foreclosure; a previous trucking business her husband operated folded and he filed for bankruptcy. She said he was “so excited” when he and Weinstein linked up as business partners.
When asked what that business entailed, Nikiforova said: “Everything. Financing. A lot of real estate.”
“Eli had some good deals and Vlad had some buyers from Russia. . . . They sold some stuff and Vlad would get something,” she said, rubbing her fingers together in a gesture indicating she meant money.
She said the family has been surviving largely on help from her parents in Moscow. Some rooms in the home were nearly empty, save a few personal belongings — stuffed animals, an ornate, full-length mirror, children’s toys — that were strewn on the floor or propped in corners. She said she’d been selling the family’s furniture for the past year.
A number she gave to contact her husband was not working Thursday evening.
“I don’t know what he did; I know he’s telling the truth,” Nikiforova said. “Now I’m just sitting and waiting.”
Weinstein faces up to 30 years in prison on the first of the two charges he is facing, along with a fine of $1 million or two times the amount of gain to him or loss to his victims, which is alleged to be $200 million.
The second count carries up to 20 years in prison, and a fine of $250,000 or two times the amount of gain to him or loss to his victims.
About a dozen FBI and IRS agents also descended Thursday morning on a commercial building on Cross Street believed to be Weinstein’s place of business. They later were seen carrying items out of the building.
Specific transactions mentioned in the complaint include a property on DeKalb Avenue in Brooklyn. Weinstein and a partner, identified only as M.G. in the complaint, allegedly bilked victim M.F. out of $6 million with a phony purchase agreement.
When that victim later confronted Weinstein about the purchase, Weinstein at one point said: “You’re right, we (expletive) you. Get over it. Don’t you wanna solve the problem?”
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NOTICE TO OUR READERS: Isaac (Yitzchok) Thomas has notified us that the posting on this page about him is false in all respects and he requested that we remove the “libelous posting.” We explained to him that we do not censure any postings on our news site but that we would post this notice.
Isaac (Yitzchok) Thomas (based out of Memphis) was heavily involved with Eli Weinstein. Besides for defrauding investors, they also defrauded the banks by prolonging the foreclosure process and pocketing the rents. There’s other lawsuits which include Thomas taking money from investors and not using it to acquire any property. http://caselaw.findlaw.com/ct-superior-court/1603831.html