Ponzi schemer who got Trump clemency convicted in new fraud case

Federal jurors convicted a New Jersey man on fraud and money laundering charges after his previous 24-year prison sentence over a Ponzi scheme was commuted by President Donald Trump in his first term.

Eliyahu “Eli” Weinstein, 49, was found guilty Monday of defrauding more than 150 investors of $41 million while falsely promising to invest their money in Covid-19 masks, scarce baby formula and first-aid kits bound for Ukraine. 

Prosecutors said Weinstein began a new crime spree soon after serving less than eight years in prison. He called himself “Mike Konig” to hide his identity from friends and family who invested in his bogus deals. As the fraud progressed, he was secretly recorded by co-conspirators. 

“I finagled, and Ponzied, and lied to people to cover us for our deals,” Weinstein said in a recording played for jurors in federal court in Trenton, New Jersey, during the seven-week trial. 

Weinstein attorney Ilana Haramati said she intended to appeal and may seek another reprieve from Trump. 

“We are going to explore every open avenue to help Mr. Weinstein vindicate himself and return to his family,” Haramati said. 

Trump commuted Weinstein’s earlier sentence when a group of congressmen, Harvard Law School professor Alan Dershowitz, former prosecutors, and other supporters, including members of the Orthodox Jewish community, campaigned for his release. 

On Jan. 20, 2021, the last day of Trump’s first term, the White House released a statement saying Weinstein was “the father of seven children and a loving husband” who had “maintained an exemplary prison history.” It said that upon his release he would have “strong support from his community and members of his faith.”

Weinstein had pleaded guilty to a Ponzi scheme in January 2013 and was sentenced to 22 years. In 2014, he got another two years for his role in a separate fraud involving the initial public offering of Facebook Inc., now Meta Platforms Inc. 

At the trial, prosecutors told jurors that Weinstein was a twice-convicted fraudster who had to hide his identity from investors and worked with a co-defendant, Aryeh “Ari” Bromberg, to raise money. 

Weinstein and Bromberg were convicted of securities fraud, wire fraud, money laundering and conspiracy counts. Weinstein was also convicted of making false statements to the US Probation Office. Both men were acquitted of some counts. 

Haramati said she would appeal the judge’s decision to tell the jury that Weinstein had two previous fraud convictions.  

“The prejudice of that ‘once a cheater always a cheater’ bias cast a long shadow over the trial,” Haramati said. 

US District Judge Michael Shipp set sentencing for both men for Sept. 17. Weinstein has been in custody in Monmouth County, New Jersey, since July 2023. 

Bromberg attorney Ricardo Solano said he also intends to appeal and that his client is “a casualty of the government’s eagerness to convict” Weinstein.

“We are obviously grateful that the jury listened to us and acquitted Ari of several counts that should have never been brought,” Solano said. “The government simply got it wrong with respect to Ari Bromberg.”

A spokesperson for interim US Attorney Alina Habba had no immediate comment.

Prosecutors said that Weinstein gambled millions of dollars in investor money at casinos. Beyond gambling, Weinstein used investor money to “buy fancy houses, fancy watches, give money to his co-conspirators, and put money toward deals that had nothing to do with what investors believed they were investing in,” Assistant US Attorney Jonathan Fayer told jurors in his closing argument on March 27. 

“This is a case about deceit,” Fayer said. “It’s not a case about redemption. It’s a case about deception. It’s a case about fraud, it’s a case about lies, and it’s a case about obstruction of justice.” 

At the time of his indictment, prosecutors said Weinberg 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. 

Five co-conspirators pleaded guilty and testified at trial in a bid for leniency at sentencing.