by Bill Singer
Motel Art, Flat Screen TVs, Bad Trades, And Bouncing Checks Collide In Federal Case
June 15, 2012
Moshe Butler, 33, Teaneck, NJ, is one of those guys who seem to love living on the edge.
According to federal prosecutors, Butler worked at a New Jersey-based company that sold mirrors and artwork to hotel and motel development companies. Using his contacts, Butler contacted numerous purchasing agents on behalf of SB Purchasing Group LLC and NI Group, one of two shell companies he controlled. Claiming to be an employee of the two companies - sometimes "John Savoy" - Butler offered to sell the purchasing agents flat panel televisions at a low cost with extended warranties. In furtherance of his pitch, Butler represented that the companies had been in business for years and had delivered thousands of televisions. At times, Butler claimed would try to seal the deal by calling as himself and urging the purchasing agents to buy from "John Savoy."
Bill Singer
If you've ever seen what passes for hotel/motel art, you might be a bit dubious about buying a discounted television from Butler. In fact, the feds alleged that only a portion of the sold units were delivered and requested refunds often paid with bouncing checks.
In 2009, Butler was charged in a criminalInformation with running a $2.25 million scam, to which he was released on bail pending sentencing.
From TVs to NSF Checks
In July 2011, Butler opened an investment account with Morgan Stanley Smith Barney LLC ("MSSB") in New York and was the sole signatory. The account allowed him to have immediate access to funds deposited by check.
On August 12, 2011, Butler deposited into his MSSB account a $50,000check, using the funds to cover the purchases of various securities and commodities option contracts. Unfortunately, Butler wasn't a great investor and within five days not only lost $68,921.
What's a hard luck scamster to do?
On August 19, 2011, Butler deposited a $100,000 check into his MSSB account to cover the negative balance in the account. The problem is that this second check was drawn on an account that had been closed by the bank two months earlier because Butler had written checks returned for insufficient funds. Undaunted, Butler withdrew $7,000 in cash in immediately available funds and purchased securities and commodities options contracts. Alas, Butler incurred another $11,496 in trading losses.
Again, I ask, what's a scamster to do?
And again, we get the same answer: In October 2011, Butler deposited a $30,000 check to cover the losses in his MSSB account, but that check was also returned for insufficient funds.
Now what?
On Dec. 14, 2011, Butler pleaded guilty to fraud and was released pending a scheduled May 8, 2012 sentencing.
For good measure, between November 2011 and March 2012, Butler somehow conned two individuals out of $170,755 in money and legal services - through the use of a number of bad checks. Wow, now there's a surprise!
Keep in mind that all this MSSB and legal services stuff was going on after Butler was out on bail pending sentencing on his television escapade. Amazing, no?
On March 7, 2012, Butler was charged with one count of bank fraud arising in connection with the MSSB fraud.
The final tally has Butler pleading guilty to two criminal Informations charging him with bank and wire fraud.
On June 13, 2012, he was sentenced to 63 months in prison and three years of supervised release; and ordered to pay restitution in the amounts of $2,259,311.35 for the television scheme and $207,375.25 for the check scheme; and ordered to forfeit $208,172.21.