Two from Secaucus-based real estate investment firm charged one pleads guilty in $650M scheme: feds
“As charged in the indictment, these defendants schemed to create a high-pressure, fraudulent marketing campaign to hoodwink investors into believing that their bogus real estate venture generated substantial profits,” Sellinger said. Together with our enforcement partners, we will continue to prioritize investigating and prosecuting financial crime in all of its forms.”
From February 2018 through January 2022, Salzano, the firm’s shadow chief executive officer, and Grabato, the president, defrauded investors and potential investors of NRIA Partners Portfolio Fund I LLC, a real estate fund operated by NRIA, of $650 million through lies, deception, misleading statements, and material omissions
These included false representations about NRIA’s financial position, how the defendants and their conspirators used fund investor money, and Salzano’s managerial role at NRIA and his history of fraud.
“This case should serve as a cautionary tale to the consumer,” FBI Special Agent in Charge James E. Dennehy said. The indictment sends a clear message that the IRS Criminal Investigation special agents and our law enforcement partners, remain vigilant and will vigorously pursue those who attempt to enrich themselves through fraudulent means.”
Salzano concealed his true managerial role at NRIA while using Grabato as a stand-in CEO in an effort to avoid scrutiny by investors of Salzano’s prior guilty plea to defrauding small businesses in Louisiana through a large telecommunications company.
The pair face close to 60 years in prison (if found guilty and issued consecutive sentences) and nearly $6 million in fines.
The president and a top officer of a Secaucus-bases real estate investment company have been charged for their roles in a scheme to defraud more than 2,000 investors in a $650 million Ponzi scheme and conspiring to evade $26 million in tax liabilities, U.S. Attorney Philip R. Sellinger said Thursday.Also Thursday, a third National Realty Investment Advisors LLC (NRIA) employee pleaded guilty to conspiracy to commit securities fraud in the same scheme.Thomas Nicholas Salzano , aka “Nicholas Salzano ,” 64, of Secaucus, and Rey E. Grabato II, 43, of Hoboken, and the Philippines, are charged in an 18-count indictment unsealed Wednesday with conspiracy to commit securities fraud , securities fraud , conspiracy to commit wire fraud, wire fraud, and conspiracy to defraud the United States. Salzano is also charged with two counts of aggravated identity theft, two counts of tax evasion, and five counts of subscribing to false tax returns. He was arrested Wednesday and appeared by videoconference Thursday before U.S. Magistrate Judge Leda Dunn Wettre. Grabato remains at large.Arthur S. Scuttaro, 62, of Nutley, the former head of sales at NRIA pleaded guilty before U.S. District Judge Evelyn Padin in Newark federal court in the same scheme. His sentencing is scheduled for Feb. 23, 2023.The company used an aggressive, national marketing campaign, promising returns of 21% to potential investors . In reality, NRIA generated little to no profits and operated as a Ponzi scheme, which was kept afloat by new investors . Despite investing almost none of their own capital into the business, the defendants misappropriated millions of dollars of investor money .“As charged in the indictment, these defendants schemed to create a high-pressure, fraudulent marketing campaign to hoodwink investors into believing that their bogus real estate venture generated substantial profits,” Sellinger said. “In reality, their criminal tactics were straight out of the Ponzi scheme playbook so that they could cheat their investors and line their own pockets.“Our message from today’s charges is that we remain deeply committed to rooting out all types of financial fraud schemes . These schemes undermine our markets and erode the public’s trust in investing. Together with our enforcement partners, we will continue to prioritize investigating and prosecuting financial crime in all of its forms.”From February 2018 through January 2022, Salzano , the firm’s shadow chief executive officer, and Grabato, the president, defrauded investors and potential investors of NRIA Partners Portfolio Fund I LLC, a real estate fund operated by NRIA, of $650 million through lies, deception, misleading statements, and material omissions, authorities said.These included false representations about NRIA’s financial position, how the defendants and their conspirators used fund investor money , and Salzano ’s managerial role at NRIA and his history of fraud.“This case should serve as a cautionary tale to the consumer,” FBI Special Agent in Charge James E. Dennehy said. “Before you entrust your hard-earned savings to someone, do your research on the trustee and the product they are selling; become familiar with the red flags that can alert you to a fraud; don’t let dollar signs cloud your judgement; and remember the old adage that if it sounds too good to be true, it probably is.” Salzano and Grabato also orchestrated a separate conspiracy to defraud the IRS in its effort to collect $26 million in outstanding taxes Salzano owed to the U.S. Treasury. Salzano and Grabato are alleged to have lied to the IRS, used a web of nominees, opened bank accounts in the names of phony entities, and used false and fraudulent company documents.“This was a brazen scheme of staggering proportions,” said Tammy Tomlins, IRS Criminal Investigation Acting Special Agent in Charge of the Newark Field Office. “These defendants prioritized their own greed, stealing $650 million from investors , while conspiring to evade $26 million in tax liabilities. The indictment sends a clear message that the IRS Criminal Investigation special agents and our law enforcement partners, remain vigilant and will vigorously pursue those who attempt to enrich themselves through fraudulent means.” Salzano concealed his true managerial role at NRIA while using Grabato as a stand-in CEO in an effort to avoid scrutiny by investors of Salzano ’s prior guilty plea to defrauding small businesses in Louisiana through a large telecommunications company.
The pair face close to 60 years in prison (if found guilty and issued consecutive sentences) and nearly $6 million in fines.
In a separate civil action, the Securities and Exchange Commission filed a complaint Thursday in New Jersey against Salzano , Grabato, Scuttaro, and others based on the allegations underlying the Ponzi scheme alleged in the indictment and information.
