Sheldon Silver's Son-in-Law Gets 2 Years for Running Ponzi Scamby
Marcello Trebitsch promised clients easy returns and low risk
Trebitsch cried and begged victims for forgiveness, U.S. said
Two weeks after one of New York’s most powerful politicians was convicted in a public-corruption trial, his son-in-law was sentenced to two years behind bars in a separate case over a multimillion-dollar Ponzi scheme.
Marcello Trebitsch bilked four clients out of almost $6 million from 2007 to 2014. The 38-year-old father of six, who lives in a small three-bedroom apartment on the second-floor of a house, had pleaded guilty in July to one count of securities fraud and asked for leniency, arguing he got himself in over his head with sophisticated clients.
During Wednesday’s hearing, the judge and prosecutors struggled to understand why the devout Jew continued the fraud for years even after his inability to execute profitable trading had become obvious.
“He hasn’t lined his pockets,” U.S. District Judge Vernon Broderick said before handing down the sentence. “It may defy explanation.”
Trebitsch blamed his “stupidity and idiocy” for what he did. “When my father died I had to succeed. I thought I could.”
Trebitsch’s father-in-law, former New York State Assembly Speaker Sheldon Silver, was found guilty Nov. 30 and is awaiting sentencing. Silver was accused of reaping almost $4 million in kickbacks and illegal fees tied to two separate frauds and through extortion.
Trebitsch sought leniency in part by claiming his relationship to Silver is what ultimately got him in trouble, though their crimes weren’t related. In court papers, Trebitsch argued that one of his victims, a wealthy Maryland real-estate developer, invested with him in a bid to be introduced to Silver.
Prosecutors said Trebitsch was wrongfully blaming the victim, even after pleading guilty, and that his clients’ motives were irrelevant.
“I never said what I did was their fault,” Trebitsch told the court. “I have to accept what I did. They trusted me and they gave me the money they earned.”
Broderick said he had planned to impose a four-year term as recently as last night but that he was swayed by rereading letters from Trebitsch’s friends and family seeking leniency.
The U.S. described in court papers how Trebitsch tearfully apologized to his victims when he couldn’t pay them back in an apparent bid to keep them from going to law enforcement. He also used "shared religious beliefs" to convince at least one victim to not report the matter, the U.S. said.
Under Trebitsch’s plea deal, the government agreed to drop a wire fraud charge, allowing him to admit to a single count of securities fraud. Trebitsch, who agreed to repay $5.9 million, had faced as long as 20 years behind bars on each of the two counts if he’d gone to trial and lost.
“The defendant was not living a high-flying lifestyle,” prosecutor Daniel Goldman said. “He didn’t have lavish cars or a lavish home.”
Trebitsch, a former intern at Goldman Sachs Group Inc., promised clients he’d use their money to trade through Allese Capital LLC, an investment fund he controlled, focusing on low-risk securities that would yield double-digit annual returns "with minimal risk of loss," the U.S. said. Instead, Trebitsch only invested a portion of the money and suffered “enormous” trading losses that he didn’t disclose to clients. The U.S. said he also used some of the money for his own benefit.
"Trebitsch’s criminal conduct was calculated, sustained, and brazen," U.S. Attorney Preet Bharara in Manhattan said in sentencing papers on Dec. 9. He "went to great lengths to conceal his fraud, using numerous bank accounts in his name, his wife’s name, and in the name of shell companies he created to layer wire transfers to conceal his crime."
The case is U.S. v. Trebitsch, 1:15-cr-00450, U.S. District Court for the Southern District of New York (Manhattan).