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Mathew Sheldon, 36, of Brooklyn, was boarding a flight from Miami to the Dominican Republic on March 19, 2011 when federal agents grabbed him.
The indictment returned today includes an original conspiracy charge and adds eight counts of wire fraud against the former part-owner, underwriter, and legal counsel for Law Funder, a litigation funding company.
“Regardless of the complexities or sophistication involved, dishonesty and fraud in the financial marketplace cannot be tolerated, as the risk and impact to honest customers is severe,” said Michael B. Ward, Special Agent In Charge of the FBI’s Newark Division.
According to the government:
Law Funder, which extends loans to plaintiffs in pending civil litigation, did business with Montclair Funding Group, LLC (“MFG”), a brokerage firm with offices in Union City, N.J.
From February 2005 through July 2009, Sheldon “conspired with a broker from MFG to design and execute a secret kickback scheme,” Fishman said. “Law Funder would get new clients either directly or through broker services, and would pay fees to the referring brokers.”
Sheldon referred clients who had contacted Law Funder directly to the MFG broker, “who would generate a fee [about half the broker’s take] by referring the client back to Law Funder,” the U.S. Attorney said.
“Sheldon and his co-conspirator concealed the kickback scheme from Sheldon’s former business partners, Law Funder, and others by, among other means, using code words, such as ‘Giants‘ or the letter “G,” in records which referred to related transactions,” Fishman said.
Sheldon “met weekly with his co-conspirator to identify the coded transactions and calculate the amount payable to Sheldon pursuant to the kickback scheme, which was paid using wire transfers and other means,” he added.
Fishman credited the FBI and thanked inspectors of the Newark division of the U.S. Postal Inspection Service.
The case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, created “to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes,” Fishman said.
The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement. Working together, they “bring to bear a powerful array of criminal and civil enforcement Resources,” the U.S. Attorney said.
No one has provided an official count, but there have been dozens of similar con men led through the federal halls of justice in Newark, Camden and Trenton since Fishman became New Jersey’s top federal prosecutor.
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