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A newly filed lawsuit reveals explosive allegations of collusion between Lakewood askonim in attempts to silence victims of a massive ponzi scheme while protecting the scammer, FAA News has shockingly learned.

The scammer allegedly induced numerous local residents to invest money with him, promising returns of 30%, while in reality the whole thing was a Ponzi scheme stealing millions of dollars from multiple parties while using fresh capital investment monies from new investments to provide returns on old investments. Simply put, he was apparently using new investor money to pay old investor money.

At one point, after at least 35 investors realized that they were completely duped, they commenced a din torah seeking to recoup whatever funds he may still have.

That din torah has not led to anything fruitful.

One investor did not seek to join the din torah. Instead, he filed a 9-count civil lawsuit against the scammer.

Highlights of the complaint, which was originally filed in New Jersey Superior Court in Ocean County by Lakewood Attorney Michael Roberts Esq., include the following:

On March 16th 2023, the scammer executed an Investment Agreement with the investor finalizing an investment and loan of Two Million Dollars.

The scammer promised a minimum investor return of 30%.

He provided false verifications, representations and information in order to secure the investment. This included an apparently falsified and altered bank statement to demonstrate his financial soundness and business dealings and investments.

In reality, the whole thing was a Ponzi scheme stealing millions of dollars from multiple parties while using fresh capital investment monies from new investments to provide returns on old investments. Simply put, he was apparently using new investor money to pay old investor money.

He colluded with a number of "brokers" to solicit victims for his ponzi scheme, actively marketing him as an investment opportunity and receiving commissions for such marketing. These brokers received millions of dollars as payments for actively participating in the ponzi scheme and fraudulent business activities.

So where did all the money go? Bank records indicate that he has wasted tremendous amounts of stolen money on gambling and similar pursuits. He also used the stolen monies to fund an extravagant and luxurious lifestyle over the last couple of years. For Pesach 2023, he took his family to the Galapagos Islands for an $85,000 vacation. He also threw multiple lavish parties at his house costing upwards of $100,000 each. 

Either way, he has represented to the investor that he does not have any money and he does not intend to pay him back.

Following commencement of the lawsuit, the investor served subpoenas on Bais Din, as well as on an expert they retained to review financial records. The subpoenas demanded production of all their records related to the schemer.

The scammer's attorney successfully got the subpoenas quashed using the argument that the demand was overbroad as it did not have any timeline, and also that the litigants in bais din voluntarily entered into a confidentiality agreement and if bais din is now forced to produce the demanded records, the parties may "get nervous and not want to continue participating in the bais din process."

According to the investor's newly filed lawsuit, this is what happened next:

The scammer is a follower of an Orthodox Jewish faith, who resides in a community of like-minded individuals in or around Ocean County, New Jersey. He does not want his bad acts and Ponzi Scheme activities to be advertised within the community in which he resides. As such, he reached out through his counsel to local religious leaders (the “Askonim”) of Lakewood for purpose of retaining additional counsel to initiate and preside over a Bais Din, so that he could avoid potential criminal charges, and keep his illicit activities relatively quiet from the public at large.

After meeting with the scammer's attorney, the Askonim apparently turned to a Baltimore attorney and hired him to do the dirty work.

The Baltimore attorney engaged in a pattern of conduct designed to coerce and intimidate the investor into dropping the lawsuit, and instead join the Bais Din - the sole purpose of the Bais Din was to prevent the community at large from having the shame of the scammer's actions become public.

The Baltimore attorney initiated numerous communications with the investor. He systematically created communal pressure against him if he would not agree to drop his civil suit and sign onto arbitration before the Bais Din and execute a confidentiality agreement to be submitted to the arbitration panel. This pressure was clearly being applied to prevent the scammer's actions from becoming known in the community at large.

These actions included the following:

At a meeting held on July 16, 2023, the investor made it clear that he believed that the scammer was hiding assets under other entities and trusts among other things. Rather than address those concerns, the Askonim threatened a retaliatory action against the investor if he chose not to join the Bais Din. They stated that if the investor continued in civil court rather than use the Bais Din process, then they would retaliate and seek to shift blame onto him as a culprit who the other victims should pursue instead.

Subsequently, the Baltimore attorney systematically created communal pressure against the investor for not agreeing to the sign onto arbitration before the Bais Din and execute a confidentiality agreement. This including by labeling the investor as a “recalcitrant” party who rejects participation in Bais Din.

In addition, on September 7, 2023, the Askonim placed additional pressure by stating that they could not settle the litigation dispute outside the confines of the Bais Din arbitration process.

Those threats proved unfruitful. The investor did not drop the lawsuit.

The Baltimore attorney's series of communications crossed the line of legal posturing into the arena of harassment by continuing to threaten the investor for not joining the Bais Din, as well as subjecting him to further acts of coercion and intimidation by repeated assertions of retaliatory litigation in the event it failed to join the Bais Din. His continuing efforts to try and hide the scammer's actions in the mire of the Bais Din arbitration process may have served the interests of the scammer, but it most certainly did not serve the interests of the investor.

Moreover, following all of this uninvited interference, his law firm then invoiced the parties for alleged services rendered in the amount of $250,000 and sought a proportional payment from the investor!

The 4 count complaint, filed by Lakewood Attorney Afiyfa H. Ellington, Esq., charges that the actions constitute a pattern of racketeering activity.

The suit demands judgement against the Baltimore attorney personally, as well against his law firm, for treble damages, compensatory damages, punitive damages, together with costs of suit, including reasonable attorney’s fees, costs of investigation, and litigation; assessing civil monetary penalties; ordering the restitution of all monies and property unlawfully obtained by defendants found to be in violation of N.J.S.A. 2C:41-2; such other civil remedies to which Plaintiff may be entitled to pursuant to N.J.S.A. 2C:41-4; and such other and further relief as the Court may deem equitable and just.

The defendants have 35 days to answer the complaint.

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1 comment:

Anonymous said...

Are some of the Askonim somehow financially involved with the Ponzi schemers?

It's time to see some names, schemers, askonim, order tofurther protect possible other victims.