Investment Hyped by Bill O’Reilly Was Ponzi Scheme, Feds Say
By Pilar Melendez
Celebrity endorsers plugged a real-estate investment that seemed too good to be true. According to prosecutors, it was.
For years, National Realty Investment Advisors promised their clients an easy way to get rich. And they had bold-faced names like Bill O’Reilly and Lawrence Taylor making their case.
After investing a few thousand dollars, the New Jersey-based group focused on high-end real estate in gentrifying neighborhoods claimed, clients might see returns of at least 12 percent. The message was repeated in thousands of emails, on huge billboards at the Lincoln and Holland tunnel, and even radio ads featuring the former Fox News host and ex-NFL star.
But on Thursday, prosecutors alleged that the investment company’s president and an associate were in fact participating in a brazen $650 million Ponzi scheme that defrauded thousands of investors.
The U.S. Attorney’s Office in New Jersey announced an 18-count indictment, including charges of securities and wire fraud, against Thomas Nicholas Salzano and Rey E. Grabato II for their role in the almost four-year-long alleged scheme. The pair also allegedly tried to evade $26 million in taxes.
Salzano was also charged with aggravated identity theft, tax evasion, and subscribing to false tax returns. Prosecutors said he was arrested on Wednesday, while Grabato was on the lam. Lawyers for Salzano did not immediately respond to a request for comment.
Neither O’Reilly nor Taylor—nor any other celebrity endorser—was charged with any offenses, and prosecutors did not indicate one way or the other whether they were aware of the firm’s alleged web of deceit. Neither immediately responded to requests for comment.
The Securities and Exchange Commission on Thursday also charged NRIA and four of its former executives—including Salzano and Grabato—with bilking 2,000 investors by falsely promising to use their money to buy and develop real estate properties. The group solicited investigators with promises of returns “of up to 20 percent.”
“Among the investors were 382 retirees who contributed more than $94.8 million from retirement accounts,” the SEC complaint states.
The SEC says that in reality, the group used the money “to pay distributions to other investors, to fund an executive’s family’s personal and luxury purchases, and to pay reputation management firms to thwart investors’ due diligence of the executives.” The federal indictment says the money was also used to pay for high-end cars, at least one week-long trip to the Jersey shore that included a banquet and hotel rooms for a dozen friends and family, and to pay Salzano’s wife at least $3,000 a week for a no-show job.
“These defendants schemed to create a high-pressure, fraudulent marketing campaign to hoodwink investors into believing that their bogus real estate venture generated substantial profits,” U.S. Attorney Philip Sellinger said in a press release announcing the charges. “In reality, their criminal tactics were straight out of the Ponzi scheme playbook so that they could cheat their investors and line their own pockets.”
more:
http://www.thedailybeast.com/bill-oreilly-and-lawrence-taylor-endorsed-a-real-estate-investment-firm-the-feds-say-is-a-ponzi-scheme?via=newsletter&source=DDAfternoon
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