Three Toms River, New Jersey men were charged in connection with an investment fraud scheme whose victims were primarily members of Orthodox Jewish communities in New Jersey and New York, the Securities and Exchange Commission announced.
The SEC’s complaint, filed in federal court in the District of New Jersey, stated that about $47 million was raised from more than 87 investors in a scheme spanning the period between November 2019 and June 2023.
The alleged orchestrator, Leor Moshe, went to investors who were active members of the Orthodox Jewish community, like him, and convinced them to invest in his company, Capital Funding ASAP LLC.
According to the SEC, Moshe told the would-be investors that their money would be used to fund short-term loans for small businesses and their investments would lead to significant fixed returns.
But rather than funding business loans, Moshe allegedly misappropriated more than $11 million from investors for his personal use and used more than $850,000 for Ponzi-like payments to earlier investors.
It was further alleged that Moshe paid fellow Toms River residents Jacob Goldman and Isaac Odes to recruit investors. Goldman and Odes, who were not registered as broker-dealers or associated with any registered broker-dealer, solicited more than $23 million from at least 25 investors, negotiated investment terms, and facilitated the collection of funds, the SEC said.
Investors from Arizona, Connecticut, Florida, Illinois, New Jersey, New York and Ohio lost more than $25 million as a result of the scheme.
“As our complaint alleges, the defendants promised some investors that they could see returns in excess of thirty percent which definitely falls into the ‘if it sounds too good to be true, it probably is’ category,” said Thomas P. Smith, Jr., Associate Director of the SEC’s New York Regional Office. “In reality, the Jersey Shore triumvirate took advantage of their relationships within Orthodox Jewish communities to raise money for Moshe’s scheme and enrich themselves.”
Moshe was charged with violations of the antifraud provisions of the federal securities laws while Goldman and Odes were charged with violations of the broker registration provisions of the Securities Exchange Act of 1934.
The SEC is seeking permanent injunctive relief, disgorgement of ill-gotten gains with prejudgment interest, and civil penalties against the defendants, and a conduct-based injunction against Moshe.
In a parallel action, the U.S. Attorney’s Office for the District of New Jersey announced criminal charges against Moshe for similar conduct. Moshe pleaded guilty to a wire fraud charge that carries a maximum penalty of 20 years in prison and a fine of $250,000, or twice the gross loss to the victim or gain to the defendant, whichever is greatest. He will be sentenced in December.
The attorneys at Hyman Cotter have decades of experience dealing with securities fraud cases and have a deep understanding of how capital markets and financial service firms are intended to work to protect investors. If you think your financial professional or firm engaged in misconduct that caused you investment losses, contact Hyman Cotter at (833) 665-0784 or through our online contact form for a no-cost evaluation of your matter.
