Long Island Investment Banker Pleads Guilty To Stealing From Clients

A Long Island investment banker pleaded guilty on Monday to a scheme to defraud investors, and will pay back millions of dollars in restitution.

Eric Erb, a former investment adviser from Levittown, pleaded guilty on Monday to wire fraud in
connection with a scheme to defraud investors utilizing his Babylon-based investment advising business. He faces up to 20 years in prison. In addition, Erb has agreed to pay approximately $5.3 million in restitution to victims of his crime. He has also agreed to forfeit $215,000 in proceeds that he earned from the sale of his former residence in Bay Shore, as well as the net proceeds from the sale of his 2004 Porsche 911 (with vanity license plate “HEDGER”) and the net proceeds from the sale of his 25-foot Regulator boat.

"With his investors relying on him to act with professionalism and integrity, Erb instead took millions of dollars from them," said Acting United States Attorney Bridget Rohde. "We will continue to work closely with our law enforcement partners to vigorously prosecute unscrupulous investment professionals and divest them of their ill-gotten gains."

According to prosecutors, between January 2016 and February 2017, Erb solicited approximately $5.4 million from investors under the promise that he would follow investors’ instructions when making various investments, including in IRAs, annuities, real estate investment trusts, hedge funds and an initial public offering, but instead he chose the investment vehicles.

Erb also emailed investors false earnings statements showing that their investments were earning profits when, in fact, they were generating losses; made wire transfers between banks in Long Island and Florida to fund investments that investors did not authorize him to make; and falsified payee information on checks that investors wrote to fund investments so that Erb could use investors’ monies to benefit himself and his companies. Erb admitted to stealing approximately $3 million from 38 investors.

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