Scarsdale man sentenced for $33M fraud scheme

A Scarsdale man has been sentenced to 10 years in federal prison after being convicted of wire fraud relating to a Ponzi scheme he ran through his Ardsley business.

Eilat Lev, 65, admitted in a plea agreement filed in U.S. District Court in Frankfort, Ky., that he defrauded investors out of approximately $33 million between 2005 and 2008. According to an FBI press release, Lev solicited investments to finance the purchase of heavy construction equipment through his business, International Tractor Co. Inc., with the agreement he would arrange for the sale of the equipment and return the amount invested, pay interest on the amount invested and share the profit made on any sale with those who provided the financing.

In 2005, an investor opened a line of credit with First Southern National Bank in Pulaski County, Ky., and used the line of credit to continue to finance transactions with Lev and his company. In order to draw from the line of credit, Lev was required to submit the same itemized documentation to the bank, which would then transfer funds, by wire, from the investor”™s line of credit to Lev”™s account at Gotham Bank of New York.

Lev admitted he perpetrated a scheme to defraud this investor, and others, by soliciting millions of dollars under false pretenses, failing to invest the funds as promised and misappropriating the funds without the knowledge of the investors. According to the FBI, rather than purchasing and selling equipment and returning the investment, interest and profit to the investors, Lev falsified purchase and sales documents and diverted new investor funds to pay prior investors their principal, interest and/or profits on prior transactions, creating the impression among investors that the business was successful, which enticed them to invest more money.

Lev”™s scheme unraveled in 2008 when he no longer had sufficient funds to repay investors.

Under federal law, Lev must serve 85 percent of his prison sentence and will be under the supervision of the U.S. Probation Office for five years.