A New Jersey man has admitted in federal court to orchestrating a massive $47 million investment fraud that victimized dozens of investors, most of them members of the chareidi community. Prosecutors said the scheme promised extraordinary returns but instead financed gambling debts, home renovations, and other personal expenses. Sentencing is scheduled for December.

The suspect pleaded guilty in federal court in Trenton to operating the multimillion-dollar investment fraud. He is scheduled to be sentenced on December 16, 2026.

According to court filings, between June 2019 and June 2023, the suspect raised approximately $47 million from 97 investors through his company, Capital Funding ASAP. Authorities said nearly all of the victims were members of the frum community. Investors were told their money would be used exclusively to finance short-term business loans and would generate annual returns ranging from 9% to 53%.

Instead, prosecutors said that the suspect operated a Ponzi scheme, using funds from new investors to pay earlier participants while diverting roughly $11 million for his own personal use. Investigators said the stolen money paid for gambling losses, home renovations, mortgage payments, and automobile loans.

U.S. Attorney Robert Fraser said that the suspect exploited the trust of the chareidi community to carry out the fraud. “The defendant turned the trust of the Orthodox Jewish community into a tool for fraud, using personal relationships to fuel a massive Ponzi scheme,” Fraser said. “Thanks to the combined efforts of our partners and federal law enforcement agencies, he has been brought to justice. Our office will continue to uncover financial fraud, protect investors, and hold accountable those who abuse positions of trust for personal gain.”

Stephanie Roddy, Special Agent in Charge of the FBI’s Newark Field Office, said investment scams can leave victims financially devastated and permanently alter their lives.

“Investment fraud can drain people’s bank accounts and change their lives. Dozens of victims placed their trust in the promises made by [the suspect], who admitted using their money to fund his gambling habit, among other things,” Roddy said. “The FBI Newark will pursue anyone who breaks the law to exploit victims, and we will do everything in our power to bring justice to every victim harmed by fraud.”

{Matzav.com}