Bill O’Reilly and Lawrence Taylor backed a real estate investment firm that the feds say is a Ponzi scheme

For years, National Realty Investment Advisors has promised its clients an easy way to get rich. And they had bold names like Bill O’Reilly Y lawrence taylor making your case.

After investing a few thousand dollars, the New Jersey-based group that focused on high-end real estate in gentrifying neighborhoods claimed clients could see returns of at least 12 percent. The message was echoed in thousands of emails, on huge billboards in the Lincoln and Holland Tunnel, and even on radio ads. with former Fox News host and former NFL star.

But on Thursday, prosecutors alleged that the investment company’s president and an associate were participating in a brazen $650 million Ponzi scheme that defrauded thousands of investors.

The US Attorney’s Office in New Jersey announced an 18-count indictment, including wire and securities fraud charges, against Thomas Nicholas Salzano and Rey E. Grabato II for their role in the alleged nearly four-year scheme. The couple also allegedly tried to evade $26 million in taxes.

Salzano was also charged with aggravated identity theft, tax evasion and filing false tax returns. Prosecutors said he was arrested Wednesday while Grabato was on the run. Salzano’s attorneys did not immediately respond to a request for comment.

Neither O’Reilly nor Taylor, nor any other famous sponsors, were charged with any crime, and prosecutors did not indicate one way or another whether they were aware of the company’s alleged web of deception. Neither immediately responded to requests for comment.

The Securities and Exchange Commission Thursday also charged NRIA and four of its former executives, including Salzano and Grabato, defrauded 2,000 investors by falsely promising to use their money to purchase and develop real estate. The group asked investigators for promises of returns “of up to 20 percent.”

“Among the investors were 382 retirees who contributed more than $94.8 million from retirement accounts,” the SEC complaint states.

The SEC says the group actually used the money “to pay distributions to other investors, to finance an executive’s family’s personal and luxury purchases, and to pay reputation management firms to thwart the due diligence of investors over executives. The federal indictment says the money was also used to pay for luxury cars, at least a week-long trip to the Jersey shore that included a banquet and hotel rooms for a dozen friends and family, and to pay the Salzano’s wife at least $3,000. a week for a no-show job.

“These defendants planned to create a high-pressure, fraudulent marketing campaign to mislead investors into believing that their bogus real estate venture generated substantial profits,” said US Attorney Philip Sellinger. said in a press release announcing the charges. “In reality, his criminal tactics were straight out of the Ponzi scheme playbook so he could fool his investors and line his own pockets.”

The indictment against Salzano and Grabato marks the latest episode in the spectacular collapse of an apparently successful real estate investment firm, albeit one that had attracted skepticism from the media in several states. Arthur Scutaro, the firm’s former head of sales, who was also charged by the SEC, pleaded guilty Thursday to one count of conspiracy to commit securities fraud in the alleged Ponzi scheme. An attorney for Scutaro could not be immediately reached. Last year, Salzano was arrested by the FBI after an hour-long police standoff, and the company filed for bankruptcy in June before being closed by the state of New Jersey.

Prosecutors say the scheme began in February 2018, when NRIA formed the investment fund “that allegedly acquired equity stakes in limited liability companies that invested in real estate assets.” The second complaint notes that the fund owned properties in New York, New Jersey, Florida and Pennsylvania.

“As part of its investments, the Fund provided investors with monthly distributions, generally between six and ten percent of their original principal investment annually, via a direct transfer to their bank accounts,” the indictment says. “Each investor in the Fund also received a written guarantee from NRIA of an annual return of at least twelve percent per year for a period of five years plus a total return on their investment, or else NRIA would pay any shortfall.” .

To market the fund, Scutaro and Salzano allegedly used an “aggressive multi-year national marketing campaign involving thousands of emails to investors; billboard, television and radio advertisements; and meetings and presentations to investors”. While the fund was deemed by marketing to be solvent, the indictment states that, in reality, NRIA “generated little or no profit and operated as a Ponzi scheme, which was kept afloat by the Fund’s new investors.”

Prosecutors went on to say that Salzano, who operated as the “shadow CEO” of the NRIA, was the “guiding force” of the company and “concealed his managerial role … to avoid scrutiny from investors and the IRS.” . A main reason he wanted to avoid detection, the indictment alleges, was his unsavory record, which included Federal Trade Commission charges in 2006.

Those charges alleged that he defrauded nonprofits, churches and small businesses when he was CEO of a New Jersey telecommunications company. Seven years later, Salzano pleaded guilty to theft by fraud in Louisiana for defrauding small businesses in that state by “falsely promising consumers that they would receive cost savings on telecommunications services.” (The The FTC case was settled in 2006 and the Louisiana charges were later dropped).

To hide Salzano’s past, prosecutors allege that he used Grabato, who was the NRIA president, as the public face of the company, making him sign all bank accounts used with NRIA and documents issued to investors. As the scheme grew, prosecutors allege, the pair began to orchestrate a separate conspiracy to defraud the IRS to hide the millions Salzano owed the IRS. This allegedly involved the couple lying to the government, using various bank accounts for fake entities, and even forging company documents.

Eventually, prosecutors say, some duped investors began demanding documentation about the supposedly bulletproof investment scheme. In response to one such lawsuit, Salzano allegedly sent a client a forged letter about an investment property in North Bergen, New Jersey. The letter ultimately ended up in the hands of the FBI—leading up to Salzano’s arrest in 2021.

But if the fact that a top dog burst might have meant a hint that his colleagues should play nice, prosecutors say, Grabato did not receive the memo.

“Following Salzano’s arrest, Grabato continued to divert at least approximately $1.4 million from Fund investors to Salzano and other Salzano family and friends through a network of shell companies and nominee accounts,” the indictment says.

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