Nassau DA: $10 Million Ponzi Scheme Unraveled Following Investigation
Mineola, NY - Sept. 21, 2018 - Nassau County District Attorney Madeline Singas announced the arrest of a financial advisor from Pennsylvania and the re-arrest of his alleged collaborator, a financial advisor from Syosset, for allegedly scamming at least 40 people – many seniors – out of more than $10 million in a Ponzi scheme.
Matthew Eckstein, 48, of Syosset, was arraigned yesterday before Judge Joy Watson on charges of:
- Two counts of Grand Larceny in the Second Degree (a C felony)
- Scheme to Defraud in the First Degree (an E felony)
- Two counts of Conspiracy in the Fourth Degree (an E felony)
Kevin Brody, 54, of Stroudsburg, PA, was arraigned yesterday before Judge Joy Watson on charges of:
- Two counts of Grand Larceny in the Second Degree (a C felony)
- Scheme to Defraud in the First Degree (an E felony)
- Two counts of Conspiracy in the Fourth Degree (an E felony)
Brody was released on $75,000 bail, and Eckstein remains out on the $75,000 bond he posted following his previous arrest. The defendants are due back in court October 3, and if convicted, they face a maximum of five to 15 years in prison.
“Taking a page from Bernie Madoff’s playbook, these defendants allegedly preyed on vulnerable victims and stole more than $10 million from 40 investors in an elaborate Ponzi scheme that included a bogus online portal showing fabricated investment growth,” DA Singas said. “Instead of providing the promised risk-free returns, the scammers allegedly squandered the investors’ cash on failed burger joints and personal expenses. I encourage any victims of this scheme to contact my office.”
DA Singas said that beginning in January 2015, an elderly victim for whom Eckstein worked as a personal accountant and financial advisor, agreed to invest approximately $385,000 into a Hicksville-based company owned by the defendants, Conmac Funding Corp., at his urging. At that time, Eckstein, who was a registered CPA, assured his client that the investment was safe, had no risk, and the principal would be returned after a two-year waiting period with an additional four-percent interest, similar to a certificate of deposit.
After waiting for two years, the victim requested the return of the money in January 2017 but received a payment of only $26,699. At that time, the defendant allegedly claimed that Conmac Funding was an insurance company and her money had to be paid back in installments. The victim continued to ask for the return of the remaining principal and interest, but Eckstein stopped communicating with her.
An NCDA investigation was started in November 2017 after the elderly victim reported the incident to officials. A search warrant executed by NCDA investigators, the U.S. Postal Inspection Service, Federal Bureau of Investigation, and the New York State Comptroller’s Office in April 2018 at Eckstein’s home office yielded thousands of pages of financial documents.
At the time of Eckstein’s original arrest in June 2018, the NCDA was aware of at least 14 people allegedly victimized by Eckstein. Since then, at least 26 more victims were found to have allegedly been scammed by the defendants out of a total of $10 million. Many of the victims are senior citizens who trusted the defendants with their retirement savings. In total – at least 40 victims came forward – allowing the NCDA to upgrade his charges and arrest Brody in connection with the alleged scheme.
Some of the victims thought they were investing in something like a certificate of deposit with a guaranteed interest rate, others were told that the money would be used to finance premium insurance loans.
Instead of investing the money into Conmac, the defendants are accused of using the money to fund other business enterprises – including hamburger restaurants – personal purchases, and paying other victims of the scheme.
Additionally, Eckstein allegedly used some of the stolen funds for the down payment on his home, which has a swimming pool and tennis court.
Eckstein and Brody also allegedly provided the victims with a username and password for www.conmacfunding.com to view their account statement and growing account balance, leading victims to believe that their principal investment was with Conmac Funding and earning interest.
The NCDA’s Asset Forfeiture Bureau has frozen all the defendants’ known assets including their bank accounts and real estate properties.
The alleged victims are from Massapequa, Seaford, Smithtown, Melville, Staten Island, Brooklyn, Manhattan, Norwalk, CT, Jupiter, FL and Redlands, CA, and met Eckstein when they were his clients at a Garden City-based investment firm or were referred to him by friends or family. Many of them were allegedly lured into the scheme by Eckstein who owned another firm called Sisk Investment Services that he ran out of his Syosset home. He’s accused of convincing his existing clients, who trusted him, to invest in Conmac.
“These defendants allegedly took advantage of people who entrusted their financial futures to them in order to steal millions to fund other business enterprises and their extravagant lifestyles,” said State Comptroller Thomas P. Dinapoli. “I commend the work of District Attorney Singas, the Federal Bureau of Investigation and the United States Postal Inspection Service for their continued partnership and diligence in exposing this fraud.”
“Stealing money from the most financially vulnerable members of our community defies belief. Many of the victims in this case didn’t have a lot of money to invest, and they were only hoping for a small return. Instead they lost what little they had saved. The FBI and our law enforcement partners are still uncovering evidence in this case so we can hold the suspects accountable, and we ask anyone who believes they may be a victim to call our office at 212-384-1000,” said William F. Sweeney, Assistant Director-in-Charge of the FBI New York Field Office.
“These individuals thought nothing of bilking their older clients out of their hard-earned savings, enriching themselves and living lavish lifestyles. Like most fraudsters, they thought they wouldn’t get caught, however most investment scams are eventually detected under the watchful eye of law enforcement,” said United States Postal Inspector in Charge Philip R. Bartlett.
The investigation is ongoing and anyone who believes that they were defrauded by Matthew Eckstein, Kevin Brody, or any investment professional, is encouraged to contact the Nassau County DA’s Financial Crimes Bureau at (516) 571-2149.
Senior Assistant District Attorney Betty Rodriguez of DA Singas’ Financial Crimes Bureau is prosecuting this case. Dennis Lemke, Esq. represents Eckstein and James Drucker, Esq. represents Brody.
A criminal charge is an accusation. A defendant is presumed innocent until and unless proven guilty.