The boss of a defunct New Jersey-based development firm has pleaded guilty to securities fraud and conspiracy charges in a $658 million Ponzi scheme that advertised market-beating investment returns for what were barely profitable real estate ventures, federal prosecutors said.
Thomas Nicholas Salzano, 65, agreed Tuesday to a prison term of eight to 12 years and to pay $516 million in forfeitures and restitution for his role as the “shadow chief executive” of National Realty Investment Advisors, of Secaucus, N.J., U.S. Attorney Philip R. Sellinger said in a statement.
“For years, Salzano told lie after lie to investors, continuously deceived them, and operated his business as a Ponzi scheme, through which he stole money from thousands of investors,” Sellinger said. “His greed and flagrant disregard for the law caused staggering losses.”
Salzano lawyer Henry E. Klingeman said in a statement that it “made sense for everyone involved to avoid a lengthy trial.” Salzano will explain himself to the court during his Aug. 6 sentencing “in pursuit of a fair outcome.”
Salzano had been indicted in the fraud involving more than 2,000 investors in October 2022 alongside NRIA President and Chief Executive Rey E. Grabato II, although prosecutors have said Grabato’s leadership role was titular. Salzano concealed his true control of the company to avoid scrutiny from investors of a history of fraud, prosecutors said.
Grabato is currently a fugitive, believed to be in the Philippines, prosecutors said in a court filing last month. A lawyer identified as Grabato’s attorney in court filings didn’t respond to a message.
Salzano, Grabato and other NRIA executives were also indicted in a separate civil action by the Securities and Exchange Commission. The SEC action had been placed on hold for the duration of the criminal case, which before Salzano’s guilty plea had been scheduled to begin next month.
NRIA filed for Chapter 11 bankruptcy protection in June 2022. Those proceedings are continuing.
NRIA had sought investors for development projects along the East Coast through frequent ads on national broadcast outlets such as Fox News and Bloomberg Radio that promised market-beating returns. In one TV ad, NRIA said it offered “targeted returns to 21%.”
“In reality, NRIA generated little to no profits and operated as a Ponzi scheme, which was kept afloat by new investors,” prosecutors said.
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