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NJ Man Pleads Guilty in Multi-Million Dollar Fraud Scheme Involving Ponzi Schemer
New Jersey Resident Admits Role in Expansive Conspiracy and Obstruction of Justice
An Ocean County man, Joel Wittels, 57, of Lakewood, New Jersey, has confessed to participating in a complex fraud operation alongside notorious Ponzi schemer Eliyahu “Eli” Weinstein and others, defrauding investors out of more than $35 million.
The admission came as part of Wittels' guilty plea in Trenton federal court to charges including conspiracy to commit securities fraud, obstruct justice, and engage in the unlicensed distribution of prescription drugs, as disclosed by U.S. Attorney Philip R. Sellinger.
The scheme capitalized on the dire circumstances of the COVID pandemic, the conflict in Ukraine, and the baby formula shortage, exploiting these crises to lure investors into fraudulent ventures. Instead of legitimate investments, the collected funds fueled a Ponzi scheme, with new investments used to pay off earlier ones.
Wittels' confession comes in the wake of guilty pleas by his associates, Christopher Anderson, Richard Curry, and Alaa Hattab, all awaiting sentencing for conspiracy to commit securities fraud. Meanwhile, charges remain pending against Eli Weinstein, Aryeh “Ari” Bromberg, and Shlomo Erez, with their involvement in the conspiracy still under judicial scrutiny.
The background of this case traces back to Weinstein's prior convictions for investor fraud totaling $230 million, leading to a 24-year prison sentence, which was substantially commuted in 2021.
Shortly after his release, Weinstein, under the alias "Mike Konig," resumed fraudulent activities through Optimus Investments Inc., along with Wittels and Bromberg. They, through Tryon Management Group LLC, deceived investors with promises of high-return investments in commodities affected by the pandemic and global crises.
The conspirators' strategy of pooling funds from new investors to pay older ones unraveled in February 2022 when they could no longer sustain the payouts, leading to a concerted effort to hide the scheme’s failures and Weinstein's true identity from their victims.
Further complicating Wittels' legal troubles is his involvement in a criminal conspiracy to distribute prescription drugs without a license, alongside Curry and others. This separate charge adds to the gravity of Wittels' offenses, showcasing a broad range of criminal activities.
Scheduled for sentencing on August 20, 2024, Wittels faces a maximum of five years in prison for each conspiracy charge, highlighting the serious consequences of securities fraud, obstruction of justice, and the unauthorized distribution of prescription medications.
The investigation leading to these charges was spearheaded by the FBI and the Food and Drug Administration's Office of Criminal Investigations, with special acknowledgment to the Securities and Exchange Commission for their assistance.
The case is represented by Assistant U.S. Attorneys Carolyn Silane, Jonathan Fayer, and Marko Pesce of the Economic Crimes Unit in Newark, underscoring the collaborative effort to prosecute economic crimes and uphold justice.
