‘Orthodox’ Jew Sentenced in $31 Million Ponzi Scheme


A New York City resident who has claimed that he is an Orthodox Jew was sentenced last week to at least six years in prison for swindling unsuspecting individuals out of more than $31 million through a Ponzi scheme.

Joseph Greenblatt, described by one of his victims as a “financial predator and a genetic sociopath,’’ was sentenced to six to 18 years in state prison in exchange for submitting a guilty plea to the charge of defrauding dozens of investors in his Paramus, New Jersey-based real estate investment company, Maywood Capital Corp. Greenblatt was also ordered to pay in excess of $23 million in restitution to the victims of his scheme, an amount equivalent to the total funds that were invested through him, excluding money that has been recouped from asset sales in an ongoing bankruptcy court case.

The sentencing in a one-hour hearing in New York State Supreme Court in Manhattan concluded a criminal prosecution that stretched out for more than five years and 114 court appearances by the confessed swindler. Greenblatt had solicited the spurious investments over a nine-year period ranging from October 1995 to December 2004. Many of the victims were elderly retirees living in Florida.

In September, the defendant pleaded guilty to grand larceny, securities fraud and other crimes. Greenblatt presented himself as an Orthodox Jew to his “clients,” who were mostly Jewish. In addition to individuals, a Brooklyn synagogue also lost significant funds due to the phony investments. As part of a plea deal, the 50-year-old Greenblatt admitted his guilt on October 1, so the sentence had already been known. However, that did not minimize the dramatic effect of statements from two of the victims, who maintained their lives were ruined because of the scam and that the economic security they had thought was assured for them in retirement was wiped out because of Greenblatt’s greed.

Greenblatt did not display any emotion throughout the hearing, even as Assistant District Attorney Michael Kitsis played a recording from one investor and read a letter from another that discussed in detail how they were harmed by the Ponzi schemer.

“He is a financial predator and a genetic sociopath,’’ said Stephen Coffey, of Venice, Fla. “He has shown no remorse or regret for the harm he has caused me or others as a result of his schemes. The only one he feels sorry for at this time is himself.’’

On one occasion, Greenblatt gave Coffey a check for $30,000 to cover the investor’s federal taxes, but later stopped payment on it, causing Coffey difficulties with the Internal Revenue Service.

Coffey, who claims to be owed $300,000, disclosed that his financial as well as physical health significantly deteriorated from Greenblatt’s actions, which forced Coffey to retract his plans to retire in North Carolina or Tennessee. “This entire situation has torn a hole in my heart that will never mend,’’ he said.

Lyle Maldoon of Nokomis, Fla., has had to deal with similar problems, as he lost his retirement savings of nearly $900,000. “We were planning to use the income from these investments to maintain a normal lifestyle and do some traveling, since we had done no major traveling while raising our family and working very hard over many years,’’ Maldoon wrote in a letter read aloud by Kitsis. “Mr. Greenblatt certainly turned our (and many other senior investors’) ‘dream years’ into a life of mediocrity and endless depression,’’ he said.

Greenblatt offered only minimal comment in court, saying that he was “very sorry’’ and that it “wasn’t my intent’’ to defraud investors. He placed some of the blame on his worries over his mother, “who was very ill’’ at the time.

Greenblatt was arrested in 2007 and indicted on 32 counts of grand larceny and fraud through a Ponzi scheme he set up with Maywood Capital. But the case was postponed while he served prison terms on unrelated charges of swindling investors in a separate Brooklyn-based company and for defrauding the federal Housing and Urban Development Department as far back as 1995. He has been in prison since early 2006, most recently on Rikers Island in New York.

While last week’s sentencing was the final part of his legal proceedings in New York, Greenblatt still has pending criminal charges in Hackensack, New Jersey, for allegedly bouncing more than 30 checks to investors, worth a total of $1.3 million. Those criminal acts encompass many of the same victims as in the Manhattan case, so any type of sentence that will be imposed is likely to be concurrent with the New York prison term.

Prior to Greenblatt’s sentence, two co-defendants who served as attorneys for Maywood Capital — former Elmwood Park Council President Joseph Mongelli and Peter Vogel of Teaneck — pleaded guilty to their roles in the massive fraud. In consideration of his health problems, Vogel was sentenced to probation, while Mongelli was sentenced in May to six months in prison.