National Realty Investment Advisors "shadow" CEO Thomas Nicholas Salzano pleaded guilty Tuesday to spearheading a scheme to defraud over 2,000 investors in a $658M Ponzi scheme and plotting to avoid millions in tax liabilities.
Salzano admitted to securities fraud, conspiracy to commit wire fraud and conspiracy to defraud the U.S., while confessing to making many misrepresentations to investors as he ran the company behind the scenes, according to a press release from the U.S. Attorney's Office in New Jersey.
“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,” U.S. Attorney Philip Sellinger said in the release. “His greed and flagrant disregard for the law caused staggering losses.”
Salzano and others defrauded investors and potential investors of its real estate fund in the period between February 2018 to January 2022 “through lies, deception, misleading statements and material omissions,” New Jersey officials said in the release.
NRIA leaders weren't honest about its financial position, how they used investors' money and Salzano's previous history of fraud at a large telecommunications company, according to the U.S. Attorney's Office.
In October 2022, the U.S. Attorney's Office in New Jersey charged Salzano and former President Rey Grabato with 18 counts of various illegal activity. Grabato was in charge of the company while Salzano concealed his role to hide his fraudulent history from investors, NJ.com reports.
Grabato was at large when authorities arrested Salzano in October 2022, and NRIA attorneys believed at the time he fled to his native Philippines.
Salzano's plea deal includes an agreement to serve a prison sentence of eight to 12 years, forfeit $8.52M obtained through illegal activities and pay a full restitution of $507.4M to the scheme's victims.
“Many people who decide to invest have to put a lot of faith in so-called financial experts, hoping their money grows and doesn’t one day disappear,” James Dennehy, the special agent in charge of the FBI's Newark field office, said in the release. “History has shown over and over and over again, Ponzi schemes don't ever pay out, yet criminals keep trying to beat the system.”
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