New York Man Sentenced to 120 Months for Wire Fraud
|U.S. Attorney’s Office July 15, 2014|
FRANKFORT, KY—A Scarsdale, New York man, who was convicted of wire fraud relating to a Ponzi scheme, was sentenced to 120 months in prison yesterday. U.S. District Court Judge Gregory F. VanTatenhove sentenced Eilat Lev, 65, on his conviction.
Lev previously admitted that he defrauded investors, of approximately $33,000,000, during a scheme he executed from 2005 through 2008. According to the plea agreement, Lev admitted that he owned a business called International Tractor Company, Inc. (ITC), located in Ardsley, New York. He was in the business of buying and selling heavy construction equipment, domestically and internationally. Lev relied, in part, on other individuals to finance the purchase of the equipment, with the agreement that he would arrange for the sale of the equipment and would return the amount invested, pay interest on the amount invested, and share the profit made on any sale with the individuals who provided the financing.
In 2002, an investor accepted an ongoing business proposition from Lev, where the investor would finance the purchase of specific items of equipment on the global market. Lev had identified the equipment for sale and had typically secured a willing buyer. For each transaction, the investor would receive paper work from Lev identifying the equipment, the amount required to purchase it, and confirmation of the sale price, which had been negotiated and agreed upon by the ultimate purchaser. Upon receiving this documentation, the investor would arrange for the transfer of money from his bank account to an account utilized by ITC, in New York. Under the terms of the agreement, Lev would complete the transaction and would return the investment, the agreed interest and, the share of the profit to the investor, within an agreed upon time frame.
In 2005, the investor opened a line of credit with First Southern National Bank located in Pulaski County, Kentucky. He used this line of credit to continue to finance transactions with Lev and his company. In order to draw from the line of credit, Lev was required to submit the same itemized documentation to the bank, which would then transfer funds, by wire, from the investor’s line of credit to Lev’s account at Gotham Bank of New York.
Lev admitted that he perpetrated a scheme to defraud this investor, and others, by soliciting millions of dollars under false pretenses, failing to invest the investors’ funds as promised, and misappropriating investors’ funds without the knowledge or authorization of the investors. In furtherance of the scheme, rather than purchasing and selling specific items of equipment and returning the investment, interest, and profit to them, Lev ran a scheme by which he falsified purchase and sales documents and diverted new investor funds to pay prior investors their principal, interest and/or profits on prior transactions, thereby creating the impression among investors that the business was successful, which enticed them to invest more money. By the end of 2008, Lev was without funds to pay his investors their principal, interest, and/or profit, causing these individuals to lose approximately $33,700,000.
Lev plead guilty in October of 2013.
Under federal law, Eilat Lev must serve 85 percent of his prison sentence and will be under the supervision of the U.S. Probation Office for five years.
Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, and Howard S. Marshall, Special Agent in Charge, Louisville Field Office of the Federal Bureau of Investigation jointly announced the sentence.
The investigation was conducted by the Federal Bureau of Investigation. The U.S. Attorney’s Office was represented by Assistant U.S. Attorney Laura K. Voorhees.