Essex County Investor’s Ponzi Scheme Busted; $1M Civil Penalty Issued

ESSEX COUNTY, NJ — An investment manager with an office in Short Hills admitted Tuesday that he fraudulently induced investments, concealed investment losses and diverted more than $675,000 in investor money for his own use as part of a four-year-long Ponzi scheme, federal authorities say.

According to the U.S. Attorney’s Office (NJ), Mark Moskowitz, 48, of Short Hills, pleaded guilty before U.S. District Judge Katharine Hayden in Newark federal court to an information charging him with one count of wire fraud.

According to court documents and statements, Moskowitz controlled an investment fund under the names Edge Trading Partners L.P. and Edge Trading LLC (Edge Trading). In addition to touting his investment skill and experience, Moskowitz allegedly concealed losses from investors and falsely told them that Edge Trading was growing year after year.

Based on these misrepresentations, investors continued to entrust additional funds to Moskowitz and left previous investments under his control, prosecutors stated.

Edge Trading was an investment fund that Moskowitz created and operated, starting in or around 2012. Moskowitz told investors that Edge Trading was invested in U.S. and foreign equities, futures contracts, and option contracts and that the fund’s investments continued to show positive returns.

In reality, Moskowitz redirected investor money to his personal use, which he concealed from the investors, prosecutors said.

The count of wire fraud to which Moskowitz pleaded guilty carries a maximum potential penalty of 10 years in prison and a $250,000 fine, prosecutors said.

Sentencing is scheduled for July 5.

Acting U.S. Attorney William Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher, with the investigation leading to the guilty plea. He also thanked the N.J. Bureau of Securities in the State Attorney General’s Office, under the direction of Attorney General Christopher Porrino and Acting Bureau Chief Amy Kopleton, for its assistance in the investigation.

$1 MILLION IN CIVIL PENALTIES

In a separate legal proceeding on Tuesday, the N.J. Bureau of Securities ordered Moskowitz and his trading company, Edge Trading LLC, to pay a $1 million civil penalty for selling unregistered fraudulent securities and misusing investors’ funds for personal expenses, prosecutors said.

According to the Bureau of Securities, Moskowitz used the funds for personal expenses, including mortgage payments on his home, entertainment, shopping and dining out.

Moskowitz misled eight investors – including three from New Jersey – into buying unregistered securities, primarily in the form of purported limited partnerships in Edge Trading, the New Jersey Office of the Attorney General stated.

The New Jersey Bureau of Securities found that from March 2012 to April 2016, Moskowitz fraudulently raised at least $798,000 from investors, claiming that the funds would be used in trading strategies that would benefit them. In reality, he used more than half of the money for his and his wife’s personal use, and to pay other investors in a Ponzi scheme, prosecutors said.

The remaining investor money raised was lost by Moskowitz, predominantly through options trading, prosecutors stated.

All but two of the eight investors had previously enrolled in online investing and day-trading courses that Moskowitz offered at prices that ranged between $2,500 and $5,450 a course, prosecutors said.

In addition to ordering Moskowitz and Edge Trading to pay a civil monetary penalty, the Acting Bureau Chief ordered them to cease and desist from violating the Uniform Securities Law and any related regulations or orders and denied certain exemptions to registration in New Jersey, prosecutors said.

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