"Federal prosecutors said former Kings County Supreme Court Justice Edward Harold King and developer Sam Sprei, also known as Yechiel Sprei, Shimon Sprei and Eli Shapiro, conspired to defraud investors by falsely claiming their money would be securely held in escrow for a bankruptcy-related property auction in Freehold, New Jersey."
"Prosecutors said Sprei told the investors they needed to deposit funds into escrow to demonstrate "proof of liquidity" in order to participate. The complaint alleges the defendants assured investors the money would remain protected in escrow and could be returned within two business days if the investors decided not to proceed with the deal."
"On Feb. 26, 2025, the investors wired approximately $6.5 million into an escrow account controlled by King, including roughly $5.5 million from one investor and $1 million from another, prosecutors said. Federal investigators allege that within days of the transfers, millions of dollars were withdrawn or transferred from the account without the investors' knowledge or authorization."
"According to prosecutors, neither King nor Sprei informed the investors the funds had been moved, despite written escrow agreements stating the money could not be transferred or used without the investors' consent. The complaint also alleges the defendants failed to provide any evidence that a ban"
A federal criminal complaint alleges that former Kings County Supreme Court Justice Edward Harold King and Brooklyn real estate developer Sam Sprei conspired to defraud investors tied to a purported commercial real estate deal in Freehold, New Jersey. Prosecutors allege Sprei solicited two investors in late 2024, claiming they could bid on a bankruptcy court auction if they deposited funds into escrow as proof of liquidity. The complaint alleges the defendants promised the money would be securely held in escrow and returned within two business days if the investors chose not to proceed. On Feb. 26, 2025, the investors wired about $6.5 million into an escrow account controlled by King. Investigators allege millions were withdrawn or transferred within days without authorization, including teller withdrawals and an $850,000 wire transfer to an account in Sprei’s name. The complaint alleges the defendants did not inform investors and that escrow agreements prohibited transferring or using funds without consent.
#investment-fraud #escrow-scheme #real-estate #federal-criminal-charges #new-jersey-bankruptcy-auction
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