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TRENTON, N.J. — A New Jersey pyramid scheme fraudster who was sentenced to 24 years in prison for fraud and whose sentence was commuted by President Donald Trump in 2021 is back behind bars for a new multi-million dollar fraud scheme.
Eliyahu “Eli” Weinstein, 51, was sentenced to 37 years in federal prison on Nov. 14 for falsely promising investors access to supplies destined for war-torn Ukraine, according to court documents. U.S. District Judge Michael A. Shipp sentenced Weinstein and ordered him to pay $44,294,803 in restitution.
Mr. Weinstein, of Lakewood, New Jersey, went to trial earlier this year and was found guilty on March 31 on 15 of 17 counts of securities fraud, wire fraud, money laundering, false statements and concealment of material facts to the U.S. Probation Service, obstruction of justice, and conspiracy to commit those crimes. He was acquitted of two charges of obstruction.
Prior to the lawsuit, Mr. Weinstein had been twice convicted in federal court for defrauding investors of a total of $230 million, according to federal prosecutors. In 2014, he was sentenced to 22 years in prison for a $200 million real estate pyramid scheme between 2004 and 2011. In 2014, while on pre-trial release for the first case, he received an additional two years in prison for further fraud.
Trump commuted Weinstein’s sentence on January 19, 2021, the day before the end of his first presidential term. As a result, Mr. Weinstein was released after serving less than eight years in prison.
“Rather than trying to make the previous victims feel better, they created more victims.”
Prosecutors said Weinstein immediately embarked on a new scheme after his release to raise money by offering lucrative opportunities to invest in deals involving COVID-19 masks, rare infant formula and first aid kits purportedly destined for war-torn Ukraine.
Weinstein hid his true identity in the business, instead using the alias “Mike Koenig,” according to documents and court statements. That’s because, as he admitted in secretly recorded conversations with his co-conspirators, investors wouldn’t give him “a penny” if they knew about Mr. Weinstein’s involvement.
Prosecutors say investors were not paid, so the co-conspirators pooled money from existing investors and agreed to pay it to other investors in a Ponzi-like manner.
After revealing his true identity to his co-conspirators in a secretly recorded meeting in August 2022, Weinstein admitted to misappropriating investor funds and said, “I deceived and lied to people to protect us,” according to court documents and court statements.
In 2024, Weinstein was indicted along with co-conspirator Arhei “Ali” Blomberg, 51, for a fraud scheme. At the time, prosecutors announced that three other alleged co-conspirators had pleaded guilty to conspiracy to commit securities fraud. That same year, two others also pleaded guilty to conspiring with Weinstein, according to the New Jersey U.S. Attorney’s Office and the USA TODAY Network’s Asbury Park Press.
“As alleged, shortly after Mr. Weinstein was released from prison after receiving a presidential commutation of his sentence, he returned to his pyramid schemes and began defrauding his victims once again,” former federal prosecutor Philip R. Sellinger said in a statement after Mr. Weinstein’s indictment. “Weinstein did not seek to complete his previous victims; he created more.”
Mr. Weinstein was tried alongside Mr. Blomberg, who was convicted on 10 charges in the indictment. Mr. Shipp sentenced Mr. Blomberg to 12 years in prison on November 14.
Contributor: Tano Nguyen, TOD, USA
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