A real estate promoter based in Israel has pleaded guilty in New York federal court to violating the Travel Act in connection with the embezzlement of $650,000 in investor funds.
Eliezer Tilson raised money from two investors in New York City in October 2019, according to a U.S. Attorney’s press release. He said he had a fund focusing on multifamily residential real estate projects.
Instead of transmitting the investors’ money to the intended fund, Tilson diverted most of the dollars to other investors in unrelated real estate projects, settling debts and paying dividends.
When the victims inquired about their funds, Tilson falsely assured them that the money was with the investment fund.
He later claimed that he had arranged a wire transfer that had not gone through. To support his deception, Tilson sent the victims a document purportedly from his bank, showing a balance of over $800,000. In fact, his account was overdrawn.
The following day, he sent the victims another document falsely indicating a wire transfer and a bank balance of over $400,000. He later admitted to the victims that he had spent their money on other payments.
Tilson pleaded guilty to one count of violating the Travel Act, which prohibits the use of facilities in interstate and foreign commerce, including wire communications, for engaging in monetary transactions derived from fraud in the sale of securities.
The law carries a maximum sentence of five years in prison. Sentencing has not been scheduled.