Livingston Man Accused of $4M Real Estate Scheme

A Livingston man was arrested Tuesday for a wire fraud scheme that bilked victims out of $4 million, the U.S. Attorney's Office said.

Abbe Edelman, 50, has been charged with six counts of wire fraud.

According to the criminal complaint, Edelman began in 2004 operating companies that bought and sold real estate. Edelman committed real estate investment fraud by obtaining millions of dollars from victims who invested in the scheme, the complaint alleged.

Edelman falsely told investors he had significant real estate experience and claimed he had a history of successfully buying and selling numerous foreclosed properties, according to the complaint.

Edelman also falsely told investors he had an MBA degree from NYU in real estate and claimed he had longstanding relationships with banks that provided him unique access to purchase foreclosed properties below market prices, the complaint said.

He also claimed he had negotiated with banks to purchase certain properties at agreed-upon prices to guarantee an easy resale and profit for the investors, according to the complaint.

However, Edelman does not have an undergraduate degree and neither he or his companies had a history of purchasing foreclosed properties.

Edelman promised as much as 25 percent returns in as little as 8 to 12 months, the complaint alleged. He also claimed to have the capital needed to purchase some of the properties from other investors that included professional athletes and celebrities, according to the complaint.

Edelman is accused of coercing victims to give him a total of $4 million and used little, if any, of it to fund real estate transactions or renovations, according to the complaint. Instead, the funds were diverted for his own use, the complaint said.

"He allegedly used the funds for his home mortgage and day-to-day living expenses, such as restaurants, telephone, and gas bills, purchased merchandise from high-end retailers, such as Gucci and Neiman Marcus, repaid existing investors in Ponzi-scheme fashion and paid his legal expenses in connection with victims seeking repayment of their investment," according to the U.S. Attorney's Office.

Edelman provided more false statements and even created a fake email account to falsely assure investors his company had closed on the foreclosed properties when the victims questioned the status of the transactions, the complaint said.

Edelman also made payments ranging from $100 to tens of thousands of dollars to the victims in order for the scheme to continue, according to the complaint. While the victims believed the funds were from the sale of the properties, the money was actually from new investors, the complaint said.

The wire fraud charges carry a maximum penalty of 20 years in prison and a $250,000 fine.