Leader of Real Estate Investment Firm Admits Role in $658 Million Ponzi Scheme and Tax Evasion Conspiracy

The shadow chief executive officer of National Realty Investment Advisors LLC finally admitted orchestrating a scheme to defraud more than 2,000 investors in a $658 million Ponzi scheme and conspiring to evade millions of dollars in tax liabilities, said Philip R. Sellinger, U.S. attorney.

Thomas Nicholas Salzano, aka “Nicholas Salzano,” age 65, of Secaucus, N.J., pleaded guilty before U.S. District Judge Evelyn Padin in Newark federal court to securities fraud, conspiracy to commit wire fraud, and conspiracy to defraud the United States. Salzano admitted he made numerous misrepresentations to investors while he secretly ran NRIA behind the scenes. He also admitted to misappropriating millions of dollars from investors to enrich himself and his family and friends.

“For years, Salzano told lie after lie to investors, continuously deceived them, and operated his business as a Ponzi scheme, through which he stole money from thousands of investors. His greed and flagrant disregard for the law caused staggering losses in excess of $650 million. This office will continue to prioritize prosecuting individuals, like Salzano, to ensure that those who engage in rampant fraud are punished with long jail sentences and are ordered to make their victims whole,” said Sellinger.

“History has shown over and over and over again, Ponzi schemes don’t ever pay out, yet criminals keep trying to beat the system. FBI Newark and our law enforcement partners are doing all we can to help the victims in this case…” said James E. Dennehy, FBI Newark special agent in charge.

“Salzano not only victimized thousands of investors, but he also defrauded honest taxpayers by concealing his income from the IRS and evading his tax liability to the tune of millions of dollars,” said Harry T. Chavis Jr., said IRS criminal investigation special agent in charge of the Boston field office.

As part of his plea agreement, Salzano has agreed to a prison term of eight to 12 years, a forfeiture money judgment in the amount of $8.52 million, and a full restitution of $507.4 million to the victims of his offenses. Sentencing is scheduled for Aug. 6, 2024.

As previously reported by The DI Wire, a class action suit was filed on Jan. 6, 2023, on behalf of a class consisting of all persons and entities other than the defendants – Salzano, Rey E. Grabato II, Daniel Coley O’Brien, and Arthur S. Scutaro – who purchased “membership units” in real estate fund NRIA Partners Portfolio Fund I LLC from at least February 2018 to January 2022. According to the filing, plaintiffs sought to recover “compensable damages” caused by the defendants’ violation of the federal securities laws and the New Jersey statutory and common law.

The lies, deception, misleading statements, and material omissions included: the financial position of NRIA, the way the defendants and their conspirators used fund investor money, and Salzano’s managerial role at NRIA and his history of fraud.

The defendants executed their scheme through an aggressive multiyear, nationwide marketing campaign that involved thousands of emails to investors; advertisements on billboards, television, and radio; and meetings and presentations to investors. Salzano led and directed the marketing campaign, which employed deception, material misrepresentations and omissions, and falsified documents to manipulate investors, which were intended to mislead fund investors into believing that NRIA was a solvent business that generated significant profits. In reality, NRIA generated little to no profits and operated as a Ponzi scheme, which was kept afloat by new investors. Despite investing almost none of their own capital into the business, the defendants misappropriated millions of dollars of investor money to support their lavish lifestyles, including expensive dinners, extravagant birthday parties, and payments to family and associates who did not work at NRIA.

Salzano concealed his true managerial role at NRIA to avoid scrutiny from investors of Salzano’s history of fraud at a large telecommunications company.

Click here to visit The DI Wire directory page.