A Syosset financial adviser stole more than $5 million in a Ponzi scheme that scammed at least 14 clients, including many who trusted him with their retirement savings, prosecutors said Tuesday.
Matthew Eckstein, 48, was charged with grand larceny and scheme to defraud. If convicted, he faces up to 15 years in prison, the Nassau County District Attorney’s Office said in a release.
Eckstein was arraigned Thursday before Judge William Hohauser, who ordered him held on bail of $125,000 bond or $75,000 cash, prosecutors said.
Eckstein’s attorney, Dennis Lemke, said he is still reviewing the necessary documents related to the charges. He said he has not seen any direct evidence suggesting that Eckstein used his clients’ funds for personal use.
Prosecutors said Eckstein’s alleged victims, who are from Melville, Seaford, Massapequa and Smithtown, among other places, met him when they were his clients at a Garden City-based investment firm or were referred to him by friends or family.
Eckstein encouraged most of his clients to invest in an insurance company known as Conmac Funding, claiming that after two years they would get their money back plus an additional 4 percent in interest, according to court records.
Some of Eckstein’s clients were encouraged to deposit thousands of dollars into an account under Conmac Funding Corp., or Conmac Capital Lending LLC, in which he held exclusive authority, according to court records.
Instead of investing the money into Conmac, prosecutors said Eckstein used it to fund other business enterprises, make personal purchases, and pay other victims of the scheme.
Prosecutors said he allegedly used the money he received from his clients as a down payment on his home, which has a swimming pool and tennis court. He opened his own brokering firm there in 2015.
One of his clients paid Eckstein more than $350,000 after he claimed Conmac was a “no risk of loss” investment. The client was promised her money back after two years, but when she contacted Eckstein in January 2017 she received a payment of just $26,699, prosecutors said.
Some of the funds were then returned in installments, but Eckstein refused to speak with her when she sought the remaining amount, according to court records.
In addition to the investment fraud, Eckstein is also accused of stealing money from two deceased clients while he was the executor of their estates. According to court records, he used $100,000 from one of his clients’ estates to pay debts he owed to other clients.