A Livingston man and three other men allegedly scammed more than $275 million in three-year scheme defrauding hedge funds, according to the U.S. District Attorney's Office in Maryland.
Federal authorities alleged Thursday that Douglas A. Kuber, 53, along with two other New Jersey men and a Florida man acquired billions of dollars in medical debt that hospitals were unable to collect and cooked the numbers to appear attractive for investors.
According to the release, Kuber and Jonathan E. Rosenberg, 44, of West Orange, ran Account Receivable Services LLC and invested in medical debts with borrowed money from investors. Rosenberg was also president of two other companies that recruited investors for medical accounts.
Authorities alleged that during a two-year period, the scam used more than $25 million to purchase 3,872,514 past due patient accounts, totaling more than $4.1 billion. The two men then started promoting and selling the investments to hedge fudges and individual investors.
Richard Shusterman, age 50, of Highland Beach, Fla., was also indicted Thursday in the 10-count indictment. Shusterman was a shareholder and president of International Portfolio Inc. which bought and sold consumer debt as part of the scheme, according to authorities.
Kuber and Robert Feldman, 65, of Beach Haven, pleaded guilty to conspiracy to commit wire fraud on Sept. 3 and Oct. 11, 2012, authorities said Thursday.
“The indictment alleges that the defendants perpetrated a brazen and complex Ponzi scheme that defrauded investors of more than $275 million,” said U.S. Attorney Rod J. Rosenstein.
Shusterman and Rosenberg each face a maximum sentence of 20 years in prison for the conspiracy and for each of nine counts of wire fraud.
The indictment seeks to recover the $278 million allegedly collected.