LAKEWOOD – An Ocean County man has admitted to conspiring with Eliyahu “Eli” Weinstein, whose 24-year federal prison sentence was reduced after being twice convicted of defrauding investors of a total of $230 million, and others to defraud investors of more than $35 million in a new fraud scheme, officials said.
Joel Wittels, 57, of Lakewood, pleaded guilty to information charging him with one count of conspiracy to commit securities fraud, one count of conspiracy to obstruct justice, and one count of conspiracy to engage in the unlicensed wholesale distribution of prescription drugs.
“Wittels scammed innocent victims into handing over their money by hiding a twice-convicted fraudster’s identity and capitalizing on the COVID pandemic, the war in Ukraine, and even shortages of baby formula,” U.S. Attorney Philip R. Sellinger said. “Instead of investing the money in legitimate ventures, Wittels and his conspirators took it and used some of it to pay off other investors in a classic Ponzi scheme.”
Three of Wittels’ conspirators, Christopher Anderson, 47, and Richard Curry, 36, and Alaa Hattab, 35, previously pleaded guilty to conspiracy to commit securities fraud and are awaiting sentencing. Charges are still pending against Wittels’ conspirators, Weinstein, Aryeh “Ari” Bromberg, and Shlomo Erez.
According to officials, Weinstein was convicted twice in New Jersey federal court for defrauding investors. His first case involved a real estate Ponzi scheme, and his second case stemmed from additional fraud Weinstein committed while on pretrial release. Combined, investors lost about $230 million.
Weinstein was sentenced to serve 24 years in prison, followed by three years of supervised release. On January 19, 2021, after Weinstein had served less than eight years, the President of the United States at that time commuted Weinstein’s term to time served, leaving intact the rest of his sentence.
After being released, Weinstein organized a new scheme to solicit money from investors through a company called Optimus Investments Inc. (Optimus). Using the fake name “Mike Konig,” Weinstein ran Optimus with Bromberg and Wittels, officials said.
“Weinstein, Bromberg, and Wittels received the bulk of investor money through a second company, Tryon Management Group LLC, which was owned and controlled by Anderson and Curry. Tryon promised these individual investors – consisting mostly of friends and family – lucrative opportunities to invest in deals involving COVID-19 masks, scarce baby formula, and first-aid kits supposedly bound for wartime Ukraine. Posing as Mike Konig, Weinstein provided information for these supposed deals. Based on that information, investors gave money to Tryon, believing the deals were legitimate and not knowing about Weinstein’s involvement. In turn, Tryon transferred those funds to Optimus,” officials said.
In February 2022, Tryon was unable to pay its investors. Instead of telling investors, the conspirators agreed to pool money from existing investors of both Optimus and Tryon and use it to make monthly payments to other investors in a Ponzi-like fashion. They hid this arrangement from investors, telling them that the payments derived from legitimate investment returns, not other investors’ money.
In August 2022, the conspirators had a series of meetings in which Weinstein revealed his true identity to Anderson and Curry.
“In these meetings, at least two of which included Wittels, Weinstein also admitted to making various false statements about purported Optimus deals and to misappropriating Tryon investor money. Both during and after these August 2022 meetings, the conspirators agreed to continue concealing Weinstein’s identity from investors and to raise additional money to pay off existing Tryon investors, all in an effort to stop the Ponzi Scheme from falling apart and to cover up the conspirators’ fraud,” officials said.
Additionally, Wittels conspired with Weinstein, Bromberg, and others to obstruct justice. They helped hide Weinstein’s assets that should have been used to pay over $200 million in restitution that he still owes his previous victims, officials said. Weinstein’s numerous business activities were also concealed.
Wittels also engaged in a separate criminal conspiracy with Curry and others to distribute wholesale quantities of prescription drugs, including insulin, on the secondary market without a wholesale license.
Wittels faces a maximum of five years in prison and a maximum fine of either $250,000 or twice the gain or loss from the offense, for the conspiracy charges.
U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge James E. Dennehy, and the Food and Drug Administration, Office of Criminal Investigations’ Metro Washington Field Office, under the direction of Special Agent in Charge George Scavdis, with the investigation leading to the charges in this case. He also expressed appreciation for the Securities and Exchange Commission, under the direction of Antonia Apps, Director of the SEC’s New York Regional Office.
The charges and allegations against Weinstein, Bromberg, and Erez are merely accusations, and they are presumed innocent unless and until proven guilty.
