#FraudWeek Special: Man Pardoned For Fraud Going Back to Prison For Fraud

Posted on by Going Concern News Desk
illustration of a fraudster

In honor of International Fraud Awareness Week, we’ve got a good one from The Guardian today:

A New Jersey man whose lengthy prison sentence for fraud convictions was commuted by Donald Trump in 2021 is now headed back to federal prison for another fraud conviction.

The US district judge Michael Shipp, sitting in Trenton, handed down a 37-year sentence on Friday to Eliyahu “Eli” Weinstein, 51, of Lakewood, who is also known as Mike Konig. Shipp also ruled that Weinstein must pay $44,294,803 in restitution, which is due immediately, according to court documents.

Weinstein was convicted in March on charges he helped defraud dozens of investors out of $35m. Prosecutors have said Weinstein and others falsely promised investors access to deals involving scarce medical supplies, baby formula and first-aid kits supposedly destined for wartime Ukraine.

The first time Weinstein ended up in federal court was for a real estate Ponzi scheme for which he earned 22 years in prison. He was then sentenced to an additional 24 months in prison in December 2014 for defrauding investors in connection with the Facebook IPO and several additional real estate deals and laundering the proceeds of the scheme. Technically he received 135 months in prison from U.S. District Judge Joel A. Pisano, however 111 months of that was to be served concurrently with his previous sentence. He was on pretrial release when he committed the Facebook IPO scheme, the details of which are described in detail by the DoJ here.

After multiple pleas from rabbis who insisted Weinstein was a changed man, he was pardoned by Trump on his way out of office on January 19, 2021. Two years later he was arrested again and here we are.

Bets on what jailhouse scheme he’ll hatch this time? He’s got plenty of time to work on something good.

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Fraudbusters Get a Lesson in Internet Stalking

Yesterday I sat in a session at the ACFE Fraud Conference and Exhibit entitled “Effectively Using Social Networks and Social Media in Fraud Examinations” with a few hundred [?] fraudbusters and I got the impression that few people in the room were social media savvy (in the stalk-y sense, anyway). I came to this conclusion after watching most of the hands in the room go up when asked “who thinks social media is a waste of time?” and saw nearly same amount of hands raised when asked “do you have some sort of social network presence?”

Cynthia Hetherington, President of Hetherington Group, described herself as “[A] librarian, a technologist and licensed private investigator. So, I’m a nerd, I’m a geek and I’m a dick,” was the speaker for this particular session and a lot of her talk introduced the crowd to the idea of stalking people on the Internet. She knew her crowd well, as a joke about Laverne & Shirley’s apartment got plenty of laughs, while a quip about Snooki got crickets. This reinforced my suspicion that the idea that of curating information about financial crooks using Facebook and Twitter was new to many in the room.

Now, the majority of people listening may have known it was possible to find partially-nude pics on someone’s Facebook profile or Twitter account (which she demonstrated in one non-Anthony Weiner example) but maybe they hadn’t considered that they could learn a lot of other useful information about someone they were investigating.

In short, Ms. Herrington explained to the biz casual crowd that you can find out a lot of information about a person just by poking around their social media accounts. Whether it’s Facebook, Twitter, or LinkedIn, you can learn someone’s likes, dislikes, their political leanings, where they’ve lived, who their friends are, etc. and use that information to build a profile, analyze behavior or in some cases, find out where someone maybe hiding.

What does all this mean? Opportunity my friends. If you fancy yourself social media and Internet savvy, you probably have a leg up on many of the vets in the fraud and forensics business when it comes to poking around the Web and finding information on people of interest to you. Sure you may not have their years of investigative expertise, extensive contacts or an aging wardrobe but you may have successfully Web-stalked ex-significant others, crushes and completely random people to learn things that they’ve volunteered into cyberspace. And here you thought your creepy behavior was completely worthless.

Madoff Auditor Pleads Guilty, Solidifies ‘Worst Auditor Ever’ Status

That’s not an official title but if you’ve got suggestions for someone else, please, enlighten us.


Reuters:

He told the court that he did not conduct any independent auditing or verification of financial statements or tax returns provided by Madoff and “others” at Bernard L. Madoff Investment Securities LLC in New York.

Friehling did not state who the ‘others’ were but the U.S. Attorney hinted that we’ll get to know sometime. For now, Friehling is a free man, out on $2.5 million bond until his sentencing which is tentatively set for February.

He faces up to 114 years in prison but similar to Madoff’s chief bald-faced liar, Frank DiPascali, his cooperation should result in a lighter sentence. And by lighter we’re guessing that means he’ll still leave prison horizontally.

Madoff Accountant Pleads Guilty [WSJ]