Have you ever been the victim of a scam? Do you wonder how easily people can be duped out of their hard-earned money? This is the story of how easy it was to fool a trusted friend.
Facebook did not offer public stock until May of 2012, but that didn’t stop a New Jersey attorney and his two partners from selling the “fake” stock to the tune of $4 million.
Attorney, Fred Todd, in March and April of 2012, convinced at least two people that he had access and approval to sell the Facebook stocks before the initial public offering (IPO).
Between March and May of that year, investors wired Todd and his partners millions of dollars to purchase the non-existent shares. Two of the investors sent the men more than $4 million.
Instead of purchasing stock for the clients, Todd and his partners used the money to pay legal debts and pay off investors in other scams they were running. Bernie Madoff, anyone?
In another scam they were running Todd and his partners, Eliyahu Weinstein and Aaron Glucksman, both of New Jersey, sold investors discounted shares in a condominium. Investors expected to resell the notes at a profit. But the purchases were never made; Todd, Weinstein and Gluckman used the money for themselves.
U.S. Attorney, Paul Fishman said in a released statement that the Facebook offer was particularly attractive to the two investors, known only as the “Facebook victims” in court papers, because they were extremely difficult to get, and would significantly increase in value after the IPO.
Todd, in September, pleaded guilty to one count each of conspiracy to commit wire fraud and transacting in criminal proceeds.
A U.S. District Judge this week sentenced Todd to forty-six months in federal prison. He also received three years supervised release, and he is ordered to pay $6.53 million in restitution.
Weinstein and Gluckman have pleaded guilty to their roles in the scams. Weinstein is sentenced to 22-years in prison, while Gluckman will spend 52- months behind bars.
Their just desserts – one can only hope so.