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TagsBY ALICIA CRUZ
NEWJERSEYNEWSROOM.COM
The former legal counsel, co-owner, and underwriter of a New York-based litigation company was arrested in Miami on a criminal complaint accusing him of orchestrating a kickback scheme that involved a New Jersey based brokerage firm, said U.S. Attorney Paul Fishman.
According to the complaint filed in Newark Federal court March 21, Matthew Sheldon a representative of Law Funder LLP, which extends loans to plaintiffs with pending civil litigation cases, conspired with an employee of Montclair Funding Group (MFG), LLC, a brokerage firm with offices in Union City to defrauded Law Funder, LLP of a million dollars.
The plot called for Sheldon to obtain new clients, either directly or through MFG, for which a fee would be paid to the broker. Clients seeking services from Sheldon would then be referred to his contact at MFG Brokerage, who would then refer the client right back to Sheldon, who would then receive a kickback of half of the broker’s fee.
Fishman said Sheldon and his co-conspirator met weekly, between February 2005 and July 2009 to identify and calculate the coded transactions, which were paid using wire transfers and other means. The individuals managed to conceal the frame-up by using code words on financial records for four years resulting in Sheldon collecting approximately $1 million in fraudulent payments.
FBI agents arrested Sheldon at the Miami International Airport on March 19 as he attempted to board a flight bound for the Dominican Republic, and charged him with one count of conspiracy to commit wire fraud. Investigators say the 36-year-old Brooklyn man used monies from the conspiracy to patronize prostitutes, buy drugs, gamble and engage in illicit activities in New York, New Jersey, and elsewhere.
Fishman said this investigation was successful in part due to the diligent efforts of inspectors at the U.S. Postal Inspection Service in Newark, including Inspector Thomas Boyle and agents of the Financial Fraud Enforcement Task Force, which was established by President Barrack Obama to wage aggressive, and coordinated investigations into financial crimes. The task force includes representatives from federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who bring to bear a powerful array of criminal and civil enforcement resources.
Newark Special Agent Michael Ward said despite the complex and sophisticated tactics used in slick financial schemes like Sheldon's, law enforcement is dedicated to catching thieves who steal from and abuse the public's trust.
“This investigation is but a far-too-often example of those who seek to defraud the financial process for their personal benefit. Hopefully the arrest of Mr. Sheldon will serve as a stark reminder of law enforcement’s resolve toward combating financial crimes," said Ward who added that dishonesty and fraud in the financial marketplace cannot be tolerated. If Sheldon is convicted, he faces 20-years in federal prison and a $250,000 fine.
