SEC charges Eliyahu Weinstein, 5 others with $38M Ponzi-like fraud of investors

Along with Weinstein, the SEC charged Aryeh L. Bromberg, Joel L. Wittels, Richard M. Curry, Christopher J. Anderson, and Alaa Mohamed Hattab for their roles in the fraudulent scheme, which involved raising investments to fund purported deals to purchase, distribute, and sell in-demand healthcare products.

The SEC alleges that, beginning in or around November 2021, Weinstein, Bromberg, and Wittels raised money from investors for purported deals through Optimus Investments Inc. while concealing Weinstein's identity, criminal history, and involvement from investors. Beginning in January 2022, Anderson and Curry allegedly began raising money for Optimus deals through Tryon Management Group LLC, and, by August 2022, they joined the other defendants in actively concealing Weinstein's role in the venture. Hattab provided substantial assistance to the other defendants in carrying out the scheme.

According to the complaint, by at least April 2022, when some of the purported Optimus deals proved to be unprofitable, Weinstein, Bromberg, Wittels, Curry, and Anderson allegedly undertook a fraudulent scheme to use funds raised from investors to make Ponzi-like payments to earlier investors while mischaracterizing them as investment returns. The SEC alleges that, collectively, the defendants' fraudulent scheme raised at least $38 million from at least 150 investors.

As described in the complaint, Weinstein is a twice-convicted felon. In 2013, he pleaded guilty to wire fraud and money laundering in a real estate Ponzi scheme that caused $200 million in losses and then pleaded guilty again in 2014 to fraud, conspiracy, and money laundering charges in connection with a $6.7 million fraudulent securities offering. In 2014, Weinstein was sentenced to 24 years in prison in connection with both schemes. On January 20, 2021, then-President Donald J. Trump commuted Weinstein's sentence to time served.

The SEC's complaint, filed in U.S. District Court for the District of New Jersey, alleges that Weinstein, Bromberg, Wittels, Curry, Anderson, and Hattab violated and/or aided and abetted violations of the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. For each defendant, the SEC seeks permanent injunctive relief, disgorgement and prejudgment interest, a civil penalty, an officer and director bar, and a conduct-based injunction, which, among other things, would prohibit their future participation in the sale of promissory notes and investment contracts.

The SEC appreciates the assistance of the U.S. Attorney's Office for the District of New Jersey and the FBI.

The SEC's continuing investigation is being conducted by Teresa A. Rodriguez, Mary Kay Dunning, Laurel S. Fensterstock, Neil Hendelman, and Wendy B. Tepperman and supervised by Tejal D. Shah, all of the New York Regional Office. The SEC's litigation will be led by Jack Kaufman of the New York Regional Office.

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Original text here: https://www.sec.gov/litigation/litreleases/2023/lr25786.htm