NEW YORK, NEW YORK — Rebuilding old homes may seem like a fun project, but when people are investing their money, they should be aware of signs of a Ponzi scheme.
One investment scheme in New Jersey ended up not offering any homes or improvement.
The pitch was strong: Invest in the renovation of old apartments in Manhattan, News York, then flip them.
Investors were told they could double even triple their money by investing with Abbe Edelman.
“We gave him a big chunk of money. To us, $15-thousand dollars is a big chunk of money,” said one woman involved in the scheme that wants to remain unidentified.
She says she did her research.
First, the apartments he wanted to buy and sell were legitimately on sale online. Second, no complaints or suits against Edelman could be found.
“On paper he looked great, but unfortunately, like so many times, it was a lot of lies,” said Greg Botti, a US Postal Inspector.
Postal inspectors say Edelman orchestrated a Ponzi scheme for 8 to 10 years.
“Only so many people can get brought in, and there is never going to be enough money, and it just collapses like a house of cards,” said the victim.
30 victims lost more than $3 million dollars.
“Even when you do your due diligence, you have to follow your instincts because he knew what he was saying to us,” she said.
This victim not only lost her money, but she also told her mom about the opportunity.
“She wrote me a $5-thousand dollar check. Now that does affect my mother. I’m the one who told her about it, so ultimately, I feel like I am the one that hurt her,” she said.
Postal inspectors say people should take the extra time and check everything when investing money.
“You can always reach out to your state bureau of securities or secretary of state and see if that person or the entities they control are registered,” said Botti.
Edelman pleaded guilty to fraud charges and was sentenced to 11 years in prison. He was also ordered to pay almost $3 million dollars in restitution.