A Teaneck, New Jersey man was sentenced today to 63 months in prison for two separate fraud schemes—swindling Morgan Stanley Smith Barney LLC and two individuals out of more than $200,000 while he was free on bail for the separate $2.25 million fraud, U.S. Attorney for the District of New Jersey Paul J. Fishman announced.
Moshe Butler, 33, previously pleaded guilty to an information charging him
with committing bank fraud while he was on pre-trial release after pleading
guilty to an information charging him with wire fraud. Butler entered his guilty
pleas before U.S. District Judge William H. Walls, who also imposed the sentence
today in Newark, N.J., federal court.
According to documents filed in this case and statements made in court:
Butler admitted that in summer 2011 he defrauded Morgan Stanley Smith Barney
LLC (MSSB) out of approximately $37,417. In July 2011, Butler opened an
investment account with Morgan Stanley in New York and was the sole signatory.
The account allowed him to have immediate access to funds deposited by check. On
August 12, 2011, Butler funded his MSSB account by depositing a $50,000 check
and used the entire amount to cover the purchases of various securities and
commodities option contracts. The purchases were largely unsuccessful and within
five days, Butler lost his entire $50,000 investment as well as an additional
On August 19, 2011, Butler deposited a $100,000 check into his MSSB account
to cover the negative balance in the account. The $100,000 check Butler
deposited was drawn against a bank account that Butler solely controlled, but
which had been closed by the issuing bank more than two months earlier because
Butler had written checks returned for insufficient funds. Butler took advantage
of the fact that the funds were immediately available by withdrawing $7,000 in
cash and purchasing numerous securities and commodities option contracts in his
account. Those purchases were also unsuccessful and resulted in additional
losses of $11,496. In October 2011, Butler deposited a $30,000 check to cover
the losses in his MSSB account, but that check was also returned for
Butler also admitted that, between November 2011 and March 2012, he
fraudulently obtained $170,755 in money and legal services from two individuals,
D.B. and C.W., and wrote them a series of bad checks.
Butler committed these acts while on pretrial release in connection with a
scheme he committed between approximately 2008 and June 2009, defrauding
multiple hotel and motel development companies out of more than $2.25 million.
At the start of the scheme, Butler worked at a New Jersey-based company that
sold mirrors and artwork to hotel and motel development companies. In this
position, Butler was in regular contact with the purchasing agents at various
development companies and was familiar with their purchasing procedures. Butler
contacted many of these purchasing agents claiming to be working for one of two
shell companies he controlled—SB Purchasing Group LLC and NI Group—and offering
to sell flat panel televisions at a low cost with extended warranties, saying
that his companies had been in business for years and had delivered thousands of
televisions. At times, Butler claimed to be “John Savoy” and would often follow
up with a call from his real persona, suggesting the customer buy from
More often than not, customers received only a portion or none of the
televisions they purchased. And when they requested a refund of the money they
had paid him, Butler often sent the customers checks that were returned for
In addition to the prison term, Judge Walls sentenced Butler to serve three
years of supervised release and to pay restitution of $2,259,311.35 in the TV
scheme and $207,375.25 in the check scheme. He was also ordered to forfeit an
U.S. Attorney Fishman credited special agents of the FBI, under the direction
of Special Agent in Charge Michael B. Ward in Newark, with the investigation
leading to today’s sentence.
The government is represented by Assistant U.S. Attorney Matthew E. Beck,
deputy chief of the U.S. Attorney’s Office General Crimes Unit in Newark.
This law enforcement action is part of efforts underway by President Obama’s
Financial Fraud Enforcement Task Force (FFETF). President Obama established the
interagency FFETF to wage an aggressive, coordinated, and proactive effort to
investigate and prosecute financial crimes. The task force includes
representatives from a broad range of federal agencies, regulatory authorities,
inspectors general and state and local law enforcement who, working together,
bring to bear a powerful array of criminal and civil enforcement resources. The
task force is working to improve efforts across the federal executive branch
and, with state and local partners, to investigate and prosecute significant
financial crimes, ensure just and effective punishment for those who perpetrate
financial crimes, combat discrimination in the lending and financial markets,
and recover proceeds for victims of financial crimes. For more information on
the task force, visit www.stopfraud.gov.
As an American, I have witnessed many events in our nation's history. Some of them great like placing a man on the moon. Some of them were dark and shameful events. No matter what happened, it is the people that make this nation great. Each looking to the future with optimism and looking to improve this nation for all. The United States is a great and wonderful nation and her people are her best asset. As Americans, we need to stand together and let our voices be heard.
Wednesday, June 13, 2012
Repeat Fraudster Sentenced to Prison, Ordered to Pay More Than $2.6 Million for Scamming Morgan Stanley, Hotel Development Companies in Separate Frauds
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