Unlicensed Commodities Trader Sentenced To 36 Months In Connection With $300,000 Ponzi Scheme
Defendant Solicited Investors By Falsely Claiming They Would Receive Profits Of Up To 10% On A Weekly Basis
Earlier today at the federal courthouse in Brooklyn, NY, Jeffrey Shalhoub was sentenced to 36 months’ imprisonment in connection with his operation of a $300,000 Ponzi scheme. Shalhoub solicited investors to invest money into his company, The 9 Group, Ltd., by telling them they would receive profits of up to 10% of their principal every week through investments in the commodity market. However, Shalhoub never held the required license to operate a commodities trading pool and, after receiving $300,000 from investors, Shalhoub embezzled over $150,000 and lost the remainder through bad investments. He concealed the theft and losses with fraudulent account statements showing that his investors’ accounts were earning returns of up to 5.2% each week. To perpetuate the fraud, Shalhoub used the money of new investors to pay off earlier investors.
The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and Philip R. Bartlett, Inspector in Charge, United States Postal Inspection Service, New York.
“Shalhoub lured his victims in with promises of high returns from a business investment. All they got, however, were false promises and phony documents, as he used lies and deception to steal the money entrusted to him,” Ms. Lynch said. “While there may be no risk-free investment, all investors are entitled to honesty and fidelity.”
The sentence was imposed by the Hon. Sterling Johnson, Jr. As part of the sentence, Judge Johnson ordered Shalhoub to pay restitution of over $240,000.
This prosecution was the result of efforts by President Obama's Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ Offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit http://www.StopFraud.gov.
The government’s case is being prosecuted by Assistant United States Attorney Tyler Smith.
Residence: Staten Island, New York
E.D.N.Y. Docket No. 13-CR-434 (SJ)