Ponzi schemer who got Trump clemency faces 50 years in new fraud
A convicted Ponzi schemer whose 24-year prison term was commuted by President Donald Trump in 2021 now faces as much as 50 years behind bars for an investor fraud that took place after his clemency.
Eliyahu “Eli” Weinstein, 51, faces sentencing Friday in federal court in Trenton, New Jersey, after being convicted of defrauding more than 150 investors out of $41 million. Investors believed their money was going to Covid-19 masks, baby formula and first-aid kits bound for Ukraine, but it actually went to gambling, real estate and luxury watches.
Prosecutors asked US District Judge Michael Shipp to sentence Weinstein to a half-century in prison – an unusually harsh term in a white-collar case. But Weinstein’s lawyer, Ilana Haramati, said he is innocent and doesn’t deserve the severe punishment that prosecutors are seeking.
“Fifty-year sentences are usually reserved for the most hardened criminals, like murderers or terrorists – not people who are wholly non-violent, like Mr. Weinstein,” Haramati said in an email.
The case is one example of what can go wrong when the president grants clemency to convicted defendants who go on to commit new crimes. Earlier this week, a loan shark and convicted drug trafficker who was freed from prison by Trump in 2021 was sentenced to 27 months in prison for repeatedly violating the terms of his federal release.
“When it comes to pardons, the White House takes them with the utmost seriousness and the President understands the responsibility that he has as President to issue pardons to individuals who are seeking that,” White House Press Secretary Karoline Leavitt said in a recent briefing. “That’s why we have a very thorough review process here that moves with the Department of Justice and the White House Counsel’s office.”
Before convicting Weinstein on March 31, jurors heard from five of his co-defendants who pleaded guilty and testified as prosecution witnesses. They described how he orchestrated the fraud and used the alias “Mike Konig” to avoid detection of his past crimes.
“Weinstein, he was the wizard of the fraud, the wizard of the lies,” Assistant US Attorney Jonathan Fayer told jurors in his closing argument. “He knew all the lies, was coordinating them, was coordinating the money.”
Weinstein gave millions of dollars in investor money to his friends so they could gamble at casinos. He bought “fancy houses, fancy watches” and “put money toward deals that had nothing to do with what investors believed they were investing in,” Fayer said. He also hid his illicit business activities and assets to avoid paying $228.7 million in restitution he still owed to his victims from his first Ponzi scheme, prosecutors said.
In 2013, Weinstein pleaded guilty to a real-estate Ponzi scheme and was sentenced to 22 years in prison by a judge who added two more years for a fraud involving the initial public offering of Facebook Inc., now Meta Platforms Inc.
He served nearly eight years before Trump commuted his sentence on the last day of his first term. Most of the victims were Orthodox Jews, and many signed letters asking Trump for mercy, citing the suffering of Weinstein’s wife and seven children.
At the time, the White House cited the support of several current and former congressmen, a prominent Jewish organization and Alan Dershowitz, the Harvard Law School emeritus professor. On the day of his release, Weinstein thanked his supporters, including Trump and his daughter, Ivanka.
“My goal is to make everybody proud of me and to lead my life in the proper fashion,” Weinstein said.
New Crimes
Prosecutors said Weinstein’s new crimes began within months of release from prison. He worked behind the scenes as “Mike Konig” with a co-defendant, Aryeh “Ari” Bromberg, in a company called Optimus Investments Inc. They solicited money for various products tied to the Covid pandemic, a baby formula shortage, and the war in Ukraine.
Two other conspirators, Christopher Anderson and Richard Curry, raised tens of millions of dollars for the projects through their company, Tryon Management Group. But Tryon began having trouble paying investors and made payments in Ponzi-like fashion. In August 2022, Anderson and Curry learned that Weinstein was using an alias to arrange deals for Optimus.
They secretly recorded Weinstein in several meetings, including one where he said: “I finagled, and Ponzied, and lied to people to cover us for our deals,” Weinstein said in a recording played for jurors during the seven-week trial.
At the meetings, Anderson and Curry agreed to continue the fraud with Weinstein rather than turn him in, they testified. Anderson told jurors he was “terrified” after learning Weinstein’s identity and felt he’d been betrayed, but he made the wrong decision to continue with the fraud.
Several months later, Anderson and Curry went with their lawyers to the FBI and US Attorney’s Office and agreed to cooperate. They then made hundreds of recordings of Weinstein, who was arrested in July 2023.
Weinstein was convicted with Bromberg of securities fraud, wire fraud, money laundering and conspiracy counts. Weinstein was also convicted of making false statements to the US Probation Office. Prosecutors recommended a sentence of 15 years for Bromberg.