Long Island Investment Adviser Pleads Guilty To Stealing $3 Million From Investors In Wire Fraud Scheme
Eric Erb, a former investment adviser, pleaded guilty earlier today to wire fraud in connection with a scheme to defraud investors utilizing his Babylon, New York-based investment advising business. Erb entered his guilty plea before United States Magistrate Judge Anne Y. Shields at the federal courthouse in Central Islip, New York. When sentenced, Erb faces up to 20 years in prison. In connection with his guilty plea, Erb has agreed to pay approximately $5.3 million in restitution to victims of his crime. Erb has also agreed to forfeit $215,000 in proceeds that he earned from the sale of his former residence in Bay Shore, New York, as well as the net proceeds from the sale of his 2004 Porsche 911 (with vanity license plate “HEDGER”) and the net proceeds from the sale of his 25-foot Regulator boat.
The guilty plea was announced by Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).
“With his investors relying on him to act with professionalism and integrity, Erb instead took millions of dollars from them,” stated Acting United States Attorney Rohde. “We will continue to work closely with our law enforcement partners to vigorously prosecute unscrupulous investment professionals and divest them of their ill-gotten gains.”
“Erb deliberately deceived investors by causing them to believe they were making money, when in reality, he was making millions off their losses,” stated FBI Assistant Director-in-Charge Sweeney. “Aiming to eliminate the prevalence of fraud, we will continue to diligently investigate unlawful schemes of this manner.”
According to court filings and facts presented at the plea hearing, between approximately January 2016 and February 2017, Erb solicited approximately $5.4 million from investors under the promise that he would follow investors’ instructions when making various investments, including in Individual Retirement Accounts, annuities, real estate investment trusts, hedge funds and an initial public offering, but instead he chose the investment vehicles. Erb also emailed investors false earnings statements showing that their investments were earning profits when, in fact, they were generating losses; made wire transfers between banks in Long Island and Florida to fund investments that investors did not authorize him to make; and falsified payee information on checks that investors wrote to fund investments so that Erb could use investors’ monies to benefit himself and his companies. During his plea allocution, Erb admitted to stealing approximately $3 million from 38 investors.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys Bradley T. King and Madeline M. O’Connor are in charge of the prosecution.
Residence: Levittown, New York
E.D.N.Y. Docket No. 17-CR-413 (ADS)