A previously convicted Ponzi schemer who had received a pardon from President Donald Trump is heading back to prison due to involvement in a new fraudulent scheme.
What Happened: Eliyahu Weinstein, a resident of New Jersey, is facing a 37-year sentence for a scam that he initiated shortly after his release from prison. Weinstein had been granted clemency by President Trump in 2021 while serving a 24-year sentence for fraud.
Post his release, Weinstein was implicated in another fraudulent scheme, swindling 150 people out of $35 million. The scam was related to the procurement of medical and security supplies for Ukraine.
As per the report by New York Post, the court has also ordered Weinstein, a former used car salesman, to pay approximately $44 million in restitution to his victims.
The prosecutors have characterized Weinstein’s scam as “brazen and sophisticated”. He duped investors into purchasing COVID-19 supplies and first-aid kits for Ukraine through his company, Optimus Investments Inc., where he was a silent partner.
Despite his promise to reform post his release, Weinstein persisted with his fraudulent activities. He was secretly recorded admitting to his actions. The scam bore a striking resemblance to a Ponzi scheme, where new investor money was used to pay off earlier investors, reports the outlet.
Why It Matters: Weinstein’s return to fraudulent activities post his release raises serious concerns about the effectiveness of the clemency granted to him.
His case serves as a stark reminder of the potential risks associated with investing in unverified ventures, particularly during times of crisis such as the COVID-19 pandemic.
It also underscores the need for stronger regulatory oversight to prevent such fraudulent schemes from taking place.
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