Former Lawmaker's Son-in-Law Gets Two Years For $6 Million Ponzi Scheme

The son-in-law of former New York politician Sheldon Silver will serve two years in federal prison for orchestrating a Ponzi scheme that duped several investors out of $6 million.  Marcello Trebitsch, 37, received the sentence after he pled guilty earlier this year to a single count of securities fraud.  In handing down the sentence, U.S. District Judge Vernon S. Broderick indicated that he departed from his original intent to sentence Trebitsch to a four-year term based on letters from friends and relatives extolling his contributions to society.  Trebitsch's sentence comes nearly one month after his father-in-law was convicted on federal corruption charges.

According to authorities, Trebitsch began soliciting investors in or around 2009 for Allese Capital, LLC ("Allese"), which Trebitsch touted as a successful investment fund that he operated with his wife.  Trebitsch, whose wife Michelle is a certified public accountant and is the daughter of Sheldon Silver, told potential investors that Allese employed a successful trading strategy through the day-trading of large cap stocks that resulted in annual returns ranging from 14% to 16%.  Trebitsch assured investors that little to none of their funds would remain invested in the market overnight, and also claimed that he cleared his trades through a major Wall Street investment bank that also had agreed to invest $50 million in Allese.  In total, Trebitsch raised at least $7 million - a majority of which was raised from a single victim.

After Trebitsch's largest investor requested a partial redemption of his investment in June 2014, Trebitsch ultimately disclosed through his attorney that he had experienced significant trading losses and that, after accounting for Trebitsch's $400,000 "fee," no money remained.  

The Complaint alleged that a forensic review of Trebitsch's bank accounts demonstrated that only a small portion of investor funds were used to engage in trading, and that Trebitsch suffered net trading losses.  A subsequent search warrant executed at Trebitsch's house apparently turned up a handwritten note that appeared to be authored by Trebitsch and stating that he "reckognize [sic] the tremendous pain along with financial," followed by the crossed-out word, "pain."