An Israel-based real estate promoter has pleaded guilty in New York federal court to travel law violations related to the embezzlement of $650,000 in investor funds.
Eliezer Tilson raised money from two New York City investors in October 2019, according to a press release from the U.S. Attorney’s Office. He said he has a fund focused on multifamily real estate projects.
Instead of transferring investors’ funds to the desired fund, Tilson diverted the majority of the funds to other investors in unrelated real estate projects, settled debts and paid dividends.
When the victims asked about the funds, Mr. Tilson falsely assured them that the funds belonged to an investment fund.
He then claimed to have arranged the wire transfer but it had not been completed. To support his deception, Mr. Tilson sent documents purporting to be from a bank to his victims showing balances of more than $800,000. In fact, his account was overdrawn.
The next day, he sent the victim a wire transfer and another document falsely showing a bank balance of more than $400,000. He later admitted to his victims that he had used the money for other payments.
Tilson pleaded guilty to one count of violating the Travel Act, which prohibits the use of interstate and foreign commerce facilities, including wire communications, to engage in financial transactions resulting from fraud in the sale of securities.
The law carries a maximum penalty of five years in prison. No sentencing has been scheduled.