The son-in-law of New York lawmaker Sheldon Silver was indicted on charges that he operated a Ponzi scheme through his investment fund that duped investors out of at least $7 million. Marcello Trebitsch, also known as Yair Trebitsch, was charged with a single count of securities fraud and a single count of wire fraud in a recently-unsealed complaint filed in the Southern District of New York. Notably, Trebitsch's father-in-law, Sheldon Silver, was recently the subject of criminal corruption charges also filed in the Southern District of New York. If convicted, Trebitsch could face up to twenty years in prison for each count.
According to the complaint, which was filed under seal on April 10, 2015 by way of a sworn affidavit by a Federal Bureau of Investigation special agent, 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 former New York Assembly Speaker 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."
The Complaint is below: