Lakewood, NJ – FBI Arrest Orthodox Jewish Real Estate Developer In Alleged Ponzi Scheme

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    Eliyahu Weinstein is led away by investigators Aug. 12, 2010. (Asbury Park Press STAFF PHOTO: THOMAS P. COSTELLO)Lakewood, NJ – Real estate developer Eliyahu Weinstein was arrested early this morning by federal agents on charges connected to a giant Ponzi scheme, just days after he and some business associates were hit with a $34 million civil judgment.

    Weinstein, 34, was taken from his home on Seton Circle and is en route to Newark for a first appearance in U.S. District Court, according to sources.

    About a dozen FBI and IRS agents also descended on a commercial building on Cross Street believed to be Weinstein’s place of business.

    Weinstein has been charged in lawsuits 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.

    The schemes, the investors claim, involved a series of land deals, a charity for children and religious organizations.

    One investor likened Weinstein to the next Bernie Madoff. Others say in court documents that Weinstein left them and their families broke.

    Weinstein has claimed in court papers that he lost the investors’ money when the real estate market tumbled.
    Federal agents outside the office of real estate developer Eliyahu Weinstein after his arrest early this morning on charges connected to a giant Ponzi scheme Thursday, August 12, 2010.Photo: Star Ledger
    Not so, say investors such as London, England-based Moshe Meisels. Meisels claims he lost tens of millions of dollars investing with Weinstein.

    In a March 15, 2008, telephone call to attorney Howard Kleinhendler — which Meisels recorded — the rabbi claimed he lost “everything” to Weinstein.

    Investors said they gave Weinstein their millions over the past five years after he promised to return huge profits to them through real estate sales. But the returns, investors say, never came. Some investors sued, saying that Weinstein never bought the properties in the first place.

    One of the plaintiff’s attorneys, Hackensack lawyer Ari Weisbrot, has claimed that Weinstein used a network of 69 Jewish charities and several corporations to “filter” at least $140 million, much of which found its way back to Weinstein, entities he controls or his creditors, according to court papers.

    Read more at Asbury Park Press


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