International Financial Law Prof Blog

Editor: William Byrnes
Texas A&M University
School of Law

Wednesday, April 15, 2015

Former New York Assemly Speaker Sheldon Silver's Headaches Mount as Son-in-Law Indicted in Ponzi Scheme

Justice logoMarcello Trebitsch, son-in-law of former New York Assembly speaker Sheldon Silver,  was arrested on wire fraud and securities charges stemming from his alleged scheme to defraud multiple investors of approximately $7 million through a fraudulent investment scheme that he allegedly perpetrated for at least five years.  Sealed Criminal Indictment

Sheldon Silver was arrested in January for using his position to obtain $4 Million in bribes and kickbacks concealed as income from outside law practice.

Among other false and misleading statements, Trebitsch allegedly lied to investors by telling them that he would use their money to trade in securities through an investment fund that he controlled, generating double-digit returns with very low risk. Instead, Trebitsch allegedly invested only a portion of the investors’ money and suffered enormous trading losses, which he failed to disclose to the investors. Trebitsch allegedly used the remainder of the investors’ money for his own personal benefit and to pay back other investors.

According to the allegations in the two-count Complaint unsealed today in Manhattan federal court:

From 2009 through December 2014, Trebitsch engaged in a multimillion-dollar fraudulent investment scheme, during which he solicited money from investors based on materially false and misleading representations. Specifically, Trebitsch told the investors that he would use their money to purchase large-cap stocks through an investment fund called Allese Capital LLC, which Trebitsch co-owned with his wife, who was a certified public accountant.

Trebitsch told the investors that he would purchase and sell stocks on a daily basis, with little or no funds invested in the market at the end of each trading day, which would minimize the risk of loss, and result in double-digit annual returns in the range of 14 to 16 percent. In fact, Trebitsch invested only a portion of the investors’ money, and instead principally used the investors’ money for his own personal benefit, including to repay other investors.  With respect to the portion of investor funds that he did use to purchase securities, Trebitsch suffered net trading losses, which he did not disclose to the investors. Rather, Trebitsch sent the investors false and misleading monthly account statements and tax forms, which purported to show positive annual returns in range of 15 to 19 percent on the investors’ investment in Allese.

During the course of the fraudulent scheme, Trebitsch solicited more than $7 million from multiple investors.

 

Trebitsch, Marcello Complaint(PDF)

https://lawprofessors.typepad.com/intfinlaw/2015/04/former-new-york-assemly-speaker-sheldon-silvers-headaches-mount-as-son-in-law-indicted-in-ponzi-sche.html

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