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Who is Eliyahu Weinstein? Notorious Ponzi schemer freed by Donald Trump faces new fraud charges

Eliyahu Weinstein and four other men are accused of bilking at least 150 people out of $35 million in various investment scams

LAKEWOOD, NEW JERSEY: In a startling turn of events, Eliyahu Weinstein, a former used car salesman from Lakewood, New Jersey who had his 24-year prison sentence commuted by President Donald J Trump in January 2021 is facing new federal charges related to a series of fraudulent schemes. Weinstein was implicated in defrauding members of his Orthodox Jewish community out of over $200 million in one of his previous Ponzi schemes. Now, he and four other men are accused of bilking at least 150 people out of $35 million in various investment scams.

Who is Eliyahu Weinstein?

According to The New York Times, the charges were filed by federal prosecutors in New Jersey, who allege that Weinstein and his co-conspirators lured victims into believing they were making lucrative investments in much-needed Covid-19 supplies, baby formula, and first-aid kits for war-torn Ukraine. These were elaborate and sophisticated crimes that were reminiscent of Weinstein's previous fraudulent activities, according to Philip R Sellinger, the US attorney for New Jersey, who expressed his concerns during a press conference. Sellinger stated, "These were brazen and sophisticated crimes that involved multiple conspirators and drew right from Weinstein’s playbook of fraud."

Weinstein's clemency was granted through non-traditional means, as Trump bypassed the official process and relied on influential lobbyists and lawyers to secure his release. Following his release, Weinstein promised to turn his life around, expressing his desire to make his supporters proud in a video message shared by The Lakewood Scoop. Weinstein had said, "My goal is to make everybody proud of me and to live my life in the proper fashion."

However, the recent charges reveal that Weinstein did not keep his promise. On the day of his arrest, federal magistrates in Trenton, New Jersey, ordered Weinstein detained, along with a co-defendant, Israeli citizen Shlomo Erez, 55. A third defendant, Aryeh L Bromberg, 49, from Lakewood, NJ, was granted bail at $500,000. Two other defendants, Joel L Wittels, 57, of Lakewood, and Alaa M Hattab, 34, of Ottawa, Canada, are still at large.

The 'Optimus Investments Inc' scam unveiled

According to prosecutors, Weinstein continued his fraudulent activities immediately after his release, operating a company called Optimus Investments Inc, which he ran alongside Bromberg and Wittels. To conceal his true identity from investors, Weinstein used the alias "Mike Konig" in his dealings with lenders, potential investors, and business partners. He was recorded saying, "I finagled and Ponzied and lied to people to cover us," in a secretly recorded conversation, revealing the extent of his deceit.

The investigation found that much of the money invested in Optimus came from another company, Tryon Management Group LLC, controlled by two unidentified co-conspirators. Tryon convinced its investors that they were participating in lucrative opportunities, funneling their money to Weinstein through Optimus. By February 2022, Tryon was unable to meet its obligations to investors, leading Weinstein to propose a Ponzi-like scheme, using money from existing investors to pay off other investors. Six months later, Weinstein revealed his true identity to Tryon's owners in a secretly recorded meeting, admitting to misappropriating investor funds and making false statements about the Optimus deals.

A troubled past and pardon controversy

Weinstein's original prison sentence was connected to two previous schemes. The first involved defrauding investors of $200 million through fake real estate and land investments, while the second claimed access to Facebook shares during the company's initial public offering. Upon the announcement of Weinstein's commutation, White House officials cited the support of Representative Jeff Van Drew, a New Jersey Republican, and lawyer Alan Dershowitz. However, Dershowitz distanced himself from Weinstein's case, stating that he had provided legal advice to an organization advocating sentence reductions, but had little or no personal involvement with Weinstein. Dershowitz said, "I had little or nothing to do with him personally. I gave legal advice to an organization that was advocating shortening sentences. If he’s found guilty a second time, he will get no mercy."

Barry Wachsler, who had helped finance Weinstein's court appeals and clemency push, continued to support him despite the new charges. Wachsler suggested that the charges were motivated by prosecutorial bitterness over Weinstein's commutation, asserting that his activities post-release were legal. Wachsler said, "They were out to get him, and they were looking for every possibility, and they got it. They wanted to teach him a lesson — whether it be hating the fact that Trump commuted his sentence, whatever it may be."