A son-in-law of indicted former Assembly Speaker Sheldon Silver was busted by the feds Monday on charges that he ran a $7 million Ponzi scheme.
Marcello Trebitsch, who’s married to Silver’s daughter, Michelle Trebitsch, allegedly promised his victims double-digit returns with very low risk before the scam collapsed last December.
Trebitsch, 37, of Brooklyn, claimed he would use investors’ money to buy large-cap stocks through Allese Capital LLC, a firm he co-owns with his wife, who is a certified public accountant,
according to a complaint unsealed Monday.
But he only actually invested a portion of the funds — and racked up “enormous trading losses” he kept secret — and then spent the rest on himself and his wife and to pay back other investors.
The charges against Trebitsch, according to sources, are not connected to the federal probe against the disgraced Silver, who is currently fighting corruption charges and was forced following his arrest to give up the leadership post in Albany he held for more than two decades.
“Investing in securities entails certain risks, but should not include the risk of being defrauded by one’s investment manager,” said Manhattan US Attorney Preet Bhahara.
Trebitsch appeared in Manhattan federal court Monday where he was released on $500,000 bond after being charged in the two-count complaint with securities and wire fraud.
He faces up to 40 years behind bars and $5.25 million in fines.
Following the hearing, his lawyer Nathaniel Marmur declined comment about the charges or when asked if he felt Trebitsch was targeted by the government because of his relation to Silver.
Trebitsch allegedly ran the scam from 2009 through December 2014, promising double-digit annual returns in the range of 14 to 16 percent.
Regarding the portion of investor funds that he did use to legitimately purchase securities, Trebitsch suffered net trading losses that he didn’t disclose to the investors. Instead, he sent the investors false monthly account statements and tax forms, which showed positive annual returns ranging from 15 to 19 percent on the investors’ investment in Allese, the feds said.
Although she has not been charged with any wrongdoing, the complaint notes that Silver’s daughter is a co-owner and managing partner in Allese and that she “kept the books” for the company.
Silver in January was arrested for allegedly lining his pockets with nearly $4 million in bribes and kickbacks in a stunning abuse of power dating to at least 2000.
The Manhattan politician, once acknowledged as the second-most powerful Democrat in the state, was forced to step down as speaker following his arrest. He remains a member of the Assembly and has said he’s “confident” he will be “vindicated in the courtroom.”
His stunning arrest capped a secret grand jury probe that began in June 2013, and marked the latest in a string of public corruption cases spearheaded by crusading Bharara.
Silver, 71, faces up to 60 years behind bars.