Brooklyn Man Arrested and Charged in Manhattan Federal Court in Connection with Multi-Million-Dollar Fraudulent Investment Scheme
Preet Bharara, the United States Attorney for the Southern District of New York, and Diego Rodriguez, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today that MARCELLO TREBITSCH was arrested this morning on wire fraud and securities charges stemming from his alleged scheme to defraud multiple investors of approximately $7 million through a fraudulent investment scheme that he allegedly perpetrated for at least five years. Among other false and misleading statements, TREBITSCH allegedly lied to investors by telling them that he would use their money to trade in securities through an investment fund that he controlled, generating double-digit returns with very low risk. Instead, TREBITSCH allegedly invested only a portion of the investors’ money and suffered enormous trading losses, which he failed to disclose to the investors. TREBITSCH allegedly used the remainder of the investors’ money for his own personal benefit and to pay back other investors.
TREBITSCH was presented today before United States Magistrate Judge Debra Freeman.
U.S. Attorney Preet Bharara said: “Investing in securities entails certain risks, but should not include the risk of being defrauded by one’s investment manager. Investment fraud is a high priority for this Office. I want to thank the FBI for working with us to protect investors and their money.”
FBI Assistant Director-in-Charge Diego Rodriguez said: “As alleged, Trebitsch took $7 million in investor money under false pretenses. Allegedly promising double digit returns to investors, Trebitsch suffered losses on what money he did invest. Trebitsch finds himself under arrest on securities and wire fraud charges.”
According to the allegations in the two-count Complaint unsealed today in Manhattan federal court:
From 2009 through December 2014, TREBITSCH engaged in a multimillion-dollar fraudulent investment scheme, during which he solicited money from investors based on materially false and misleading representations. Specifically, TREBITSCH told the investors that he would use their money to purchase large-cap stocks through an investment fund called Allese Capital LLC, which TREBITSCH co-owned with his wife, who was a certified public accountant. TREBITSCH told the investors that he would purchase and sell stocks on a daily basis, with little or no funds invested in the market at the end of each trading day, which would minimize the risk of loss, and result in double-digit annual returns in the range of 14 to 16 percent. In fact, TREBITSCH invested only a portion of the investors’ money, and instead principally used the investors’ money for his own personal benefit, including to repay other investors.
With respect to the portion of investor funds that he did use to purchase securities, TREBITSCH suffered net trading losses, which he did not disclose to the investors. Rather, TREBITSCH sent the investors false and misleading monthly account statements and tax forms, which purported to show positive annual returns in range of 15 to 19 percent on the investors’ investment in Allese.
During the course of the fraudulent scheme, TREBITSCH solicited more than $7 million from multiple investors.
TREBITSCH, 37, of Brooklyn, New York, is charged with one count of wire fraud and one count of securities fraud. The wire fraud count and the securities fraud count each carry a maximum sentence of 20 years in prison; the wire fraud charge carries a maximum fine of $250,000, or twice the gross gain or loss from the offense, and the securities fraud charge carries a maximum fine of $5 million, or twice the gross gain or loss from the offense. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. Mr. Bharara praised the work of the FBI. He added that the investigation is continuing.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Daniel S. Goldman and Amy Lester are in charge of the prosecution.
The allegations contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.