Eliyahu Weinstein has been arrested but it's the SEC that got its press release out first. It is seeking, inter alia, forfeiture of the moneys claimed to be the subject of a securities fraud. The arrest is more bad news for former US President Trump who had Weinstein released in 2021 while he was serving a sentence of 24 years in jail for two frauds. Trump's intervention was not to pardon him, as some are reporting, but to commute his sentence to time served which, at that time, was eight years.

Weinstein, who operated in New Jersey, was first charged in a Ponzi scheme involving real estate. While he was on bail pending trial for that offence, he committed another fraud. The total "take" of those two offences was approx USD230 million.

Using a fake name, Mike Konig, Weinstein created a new company called Optimus Investments, Inc. say prosecutors who recorded him admitting that no-one would give him a penny if Weinstein's involvement were to become public. New Jersey DoJ prosecutors are getting fed up with it. "This is now the third time this office has charged Weinstein with a large-scale scheme to rip off investors," U.S. Attorney Philip Sellinger said yesterday.

Aryeh L. Bromberg, Joel L. Wittels, Richard M. Curry, Christopher J. Anderson, and Alaa Mohamed Hattab are also the subjects of the SEC complaint. The Commission says "Beginning in January 2022, Anderson and Curry allegedly began raising money for Optimus deals through Tryon Management Group LLC, and, by August 2022, they joined the other defendants in actively concealing Weinstein’s role in the venture. Hattab provided substantial assistance to the other defendants in carrying out the scheme. when some of the purported Optimus deals proved to be unprofitable, Weinstein, Bromberg, Wittels, Curry, and Anderson allegedly undertook a fraudulent scheme to use funds raised from investors to make Ponzi-like payments to earlier investors while mischaracterizing them as investment returns.

The two-pronged approach is necessary because some orders sought by the SEC are not available in the criminal courts. The Commission seeks, against, each defendant, the SEC seeks permanent injunctive relief, disgorgement and pre-judgment interest, a civil (monetary) penalty, an officer and director bar and a conduct-based injunction, which, among other things, would prohibit their future participation in the sale of promissory notes and investment contracts.

The Department of Justice has fleshed out the activities: Weinstein allegedly falsely promised access to deals involving scarce medical supplies, baby formula, and first-aid kits supposedly destined for wartime Ukraine. Weinstein, Bromberg, and Wittels received the bulk of victim's money through a second company, Tryon Management Group LLC, which was owned and controlled by two other conspirators.

The list of defendants in the criminal case is different: Eliyahu “Eli” Weinstein, aka Mike Konig, 48, Aryeh “Ari” Bromberg, 49, and Joel Wittels, 57, all of Lakewood, New Jersey, along with Shlomo Erez, 55, a citizen and resident of Israel, and Alaa Hattab, 34, of Otttowa, Canada each charged with one count of wire fraud conspiracy and one count of conspiracy to obstruct justice.

Weinstein seems to have a strange approach to life. The Optimus Investments scheme was begun very shortly after his release - but he was still on licence. James E. Dennehy of the Newark FBI said. “He was aware his actions were against the terms of his release on a previous investment fraud conviction, and we allege he engaged in criminal activity anyway. "

Department of Justice statement: https://www.justice.gov/usao-nj/pr/convicted-ponzi-schemer-four-other-m…
https://www.justice.gov/d9/2023-07/weinsteinetal.complaint.pdf
Commission complaint: https://www.sec.gov/litigation/complaints/2023/comp-pr2023-134.pdf