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Feds Charge Son-in-Law of Prominent New York Politician With Securities Fraud

On April 13, federal prosecutors in New York City charged a Brooklyn man with scheming to defraud investors out of more than $7 million. The U.S. Attorney’s Office in Manhattan claims Marcello Trebitsch, also known as Yair Trebitsch, promised to invest customer funds while actually appropriating money for himself. Trebitsch is married to the daughter of Sheldon Silver, the former speaker of the New York State Assembly, who was himself charged by the U.S. Attorney’s Office in an unrelated bribery case and faces trial later this year.

United States v. Trebitsch

According to an affidavit filed by Special Agent Constantine S. Voulgaris of the Federal Bureau of Investigation, Trebitsch has been defrauding investors since at least 2009. The affidavit said Trebitsch solicited clients for his company, Allese Capital, LLC, with promises of investing their money in “large-cap stocks traded on major stock exchanges.” Trebitsch claimed his investment strategy would provide “annual returns in the range of 14 to 16 percent.”

But the FBI said Trebitsch only invested “a portion” of his customers’ funds as promised. In reality, he used most of the funds raised “for his own personal benefit and the benefit of others, including to repay other investors,” which is characteristic of a Ponzi scheme. Furthermore, the money Trebitsch actually invested “suffered net trading losses,” according to Special Agent Voulgaris, which Trebitsch concealed by furnishing his customers with “phony account statements” and other false documentation.

Special Agent Voulgaris cited interviews with two unidentified “victims” of Trebitsch’s fraud. The first victim was a real estate developer who said he invested “more than $6.5 million” with Trebitsch, only to receive about $2.2 million in return. A second victim invested about $700,000 and never saw any returns. The FBI said its investigation revealed Trebitsch transferred “hundreds of thousands of dollars” of the two victims’ funds to accounts controlled by him and his wife, who is also a certified public accountant. Special Agent Voulgaris added that upon executing a search warrant for Trebitsch’s home in April 2014, he found a handwritten note by Trebitsch admitting to his crimes.

Risks vs. Illegal Acitivity

Trebitsch is of course innocent until found guilty in a court of law. But the charges against him highlight risks that all investors should be aware of. Securities fraud is based on unscrupulous individuals willing to manipulate honest investors with promises of large, risk-free gains. But all investing entails risk. However, as the Manhattan U.S. Attorney noted in charging Trebitsch, that “should not include the risk of being defrauded by one’s investment manager.” Any person who accepts investment funds on behalf of another has a legal duty to use that money as promised. There is never any justification for an investment manager diverting client funds for personal use. And there are certainly no circumstances that would ever justify the type of behavior alleged in the Trebitsch case, such as preparing false documents designed to mislead investors about the status of their own funds.

If you have been the victim of a Ponzi scheme or similar securities fraud and need competent legal advice on how to proceed, contact Florida stockbroker fraud attorney Gregory Tendrich, P.A., right away.

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