Federal prosecutors said a Levittown man who ran an investment-advising firm in Babylon faces up to 20 years in prison after he pleaded guilty Monday to defrauding more than three dozen clients of about $3 million.
Eric Erb, 39, who ran Erb Capital Management, pleaded guilty to wire fraud in federal court in Central Islip before U.S. Magistrate Judge Anne Y. Shields, prosecutors said — adding that he agreed to pay approximately $5.3 million in restitution to up to 38 victims, turn over $215,000 in proceeds from the sale of his Bay Shore home and forfeit proceeds from the sale of both his 2004 Porsche 911 and a 25-foot boat.
Erb was released on $250,000 bail, officials said, and he is scheduled to be sentenced on Nov. 17.
On Monday, Erb admitted to stealing approximately $3 million from 38 investors, authorities said. Officials said the negotiated plea agreement requires Erb to repay more than he admitted to stealing to give investors additional compensation.
“With his investors relying on him to act with professionalism and integrity, Erb instead took millions of dollars from them,” acting U.S. Attorney Bridget M. Rohde said in a news release announcing the plea.
“Erb deliberately deceived investors by causing them to believe they were making money, when in reality, he was making millions off their losses,” said FBI Assistant Director-in-Charge William F. Sweeney Jr.
Erb’s attorney, Chad Seigel of Manhattan, said Erb is remorseful and that he voluntarily brought his misdeeds to the attention of authorities.
“It’s obviously a very difficult process, but he’s holding up and still looks toward the future, one in which he can, hopefully, make everyone whole and moves on with his life in a positive way,” Seigel said.
Prosecutors said that between January 2016 and February 2017, Erb “solicited approximately $5.4 million from investors under the promise that he would follow investors’ instructions when making various investments, including in Individual Retirement Accounts, annuities, real estate investment trusts, hedge funds and an initial public offering, but instead he chose the investment vehicles.”
They said he sent clients bogus statements “showing that their investments were earning profits when, in fact, they were generating losses,” and that he made unauthorized wire transfers between banks in Long Island and Florida and “falsified payee information on checks that investors wrote to fund investments so that Erb could use investors’ monies to benefit himself and his companies.”