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Posted on: June 12, 2018

$5 Million Ponzi Scheme Unraveled Following NCDA Investigation

ECKSTEIN, MATTHEW

MINEOLA, N.Y. – Nassau County District Attorney Madeline Singas announced the arrest of a financial advisor from Syosset for allegedly scamming at least 14 people, mostly seniors, out of more than $5 Million in a Ponzi scheme.

Matthew Eckstein, 48, was arraigned June 7 before Judge William Hohauser on charges of:

  • Three counts of Grand Larceny in the Second Degree (a C felony)
  • Grand Larceny in the Third Degree (a D felony)
  • Two counts of Scheme to Defraud in the First Degree (an E felony)

Bail was set at $125,000 bond or $75,000 cash and the defendant is due back in court July 2. If convicted, he faces a maximum of five to 15 years in prison.

“This unscrupulous financial advisor allegedly betrayed his clients’ trust when he stole their money in a multi-million dollar Ponzi scheme and even pilfered hundreds of thousands from the estates of deceased clients,” DA Singas said. “The charges are even more egregious because many of the alleged victims were elderly and seeking safe investments for their retirement funds. I am grateful to our partners in the office of Comptroller DiNapoli, the FBI, USPIS, and Securities Exchange Commission for their assistance with this case.”

DA Singas said that, beginning in January 2015, an elderly victim for whom the defendant worked as a personal accountant and financial advisor, agreed to invest approximately $385,000 into a company, Conmac Funding, at his urging. At that time, the defendant assured his client that the investment was safe, had no risk, and the principal would be returned after a two-year waiting period with an additional four-percent interest similar to a certificate of deposit.

After waiting for two years, the victim requested the return of the money in January 2017, but received a payment of only $26,699. At that time, the defendant allegedly claimed that Conmac Funding was actually an insurance company and her money had to be paid back in installments. The victim continued to ask for the return of the remaining principal and interest, but Eckstein stopped communicating with her.

A search warrant executed by NCDA investigators, US Postal Inspection Service, FBI, and the NYS Comptroller’s Office in April of 2018 at Eckstein’s home office yielded thousands of pages of financial documents. Instead of investing the money into Conmac, the defendant is accused of using the money to fund other business enterprises, personal purchases and paying other victims of the scheme.

In addition to the alleged investment fraud, the investigation also revealed that Eckstein allegedly committed estate fraud while acting as the executor of the estates of two deceased clients, stealing hundreds of thousands of dollars. In one instance Eckstein recuperated some unclaimed funds from the NYS Comptroller’s Office and allegedly used the money to pay off debts instead of forwarding it to the decedent’s heirs. In the second instance the decedent wanted her money distributed to charity, but instead Eckstein allegedly deposited over $100,000 of those funds into an account where he had signatory powers, and again used the money to pay debts to his clients.

The investigation found that 14 victims were allegedly scammed out of a total of more than $5,000,000 by Eckstein. Many of the victims are senior citizens who trusted the defendant with their retirement savings.

The alleged victims are from Massapequa, Seaford, Smithtown, Melville, Staten Island, Brooklyn, Manhattan, Norwalk, CT, Jupiter, FL and Redlands, CA, and met the defendant when they were his clients at a Garden City-based investment firm or were referred to him by friends or family.

The defendant started his own business, Sisk Investment Services, Inc. in 2015, which operated from his home. He allegedly used some of the stolen funds for the down payment on his Oyster Bay Cove home, which has a swimming pool and tennis court. The District Attorney has also filed a civil attachment on Eckstein’s residence.

New York State Comptroller Thomas P. DiNapoli said, “Mr. Eckstein betrayed the trust placed in him by his clients to fund his extravagant lifestyle. My office will continue to assist in the work of ensuring that this money is recovered. I thank Nassau County District Attorney Madeline Singas for her diligence in protecting New Yorkers from financial fraud.”

Assistant Director in Charge of the FBI's New York Field Office William F. Sweeney Jr. said, “Exploiting the elderly by stealing their money is among the most incomprehensible of all financial crimes. As alleged, Eckstein did just that when he lured his victims in under false investment promises and refused to make good on the deals he made. In some cases, as charged, he’s even accused of misappropriating estate funds to benefit his own interests, setting aside his legal responsibility as executor to allocate assets in accordance with the wishes of the deceased. Today’s arrest may never make things better for those who were defrauded, but it will put an end to a series of crimes that went on for too long.”

United States Postal Inspector in Charge Peter R. Rendina said, “Mr. Eckstein allegedly used his business acumen to devise a scheme to defraud his clients of their hard-earned investments, and for some their retirement savings. In his pursuit to enrich his own lifestyle, he underestimated the resolve of Postal Inspectors and their law enforcement partners to bring those to justice whose greed overshadows honest business practices.”

The NCDA investigation began with a referral from the Securities Exchange Commission in November, 2017. The investigation is ongoing and anyone who believes that they were defrauded by Matthew Eckstein, or any investment professional, is encouraged to contact the Nassau County DA’s Financial Crimes Bureau at (516) 571-2149.
Senior Assistant District Attorney Betty Rodriguez of DA Singas’ Financial Crimes Bureau is prosecuting this case. The defendant is represented by Dennis Lemke, Esq. The Nassau County District Attorney’s Civil Forfeiture Bureau is also assisting in this case.

The charges are merely accusations and the defendant is presumed innocent until and unless found guilty.

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