‘Shadow CEO’ of Real Estate Investment Firm Pleads Guilty to $650M Ponzi Scheme

Nicholas Salzano agreed to a prison term of eight to 12 years for securities fraud, conspiracy to commit wire fraud and conspiracy to defraud the U.S.

The “shadow” CEO of a New Jersey real estate investment firm has pleaded guilty to defrauding more than 2,000 investors of more than $650 million through a Ponzi scheme while also conspiring to evade tens of millions of dollars in taxes.

The U.S. Attorney’s Office for the District of New Jersey referred to Nicholas Salzano as the “shadow chief executive officer” of Secaucus-based National Realty Investment Advisors who secretly ran the company behind the scenes. Salzano admitted to misappropriating millions of dollars from investors to benefit himself, his family and friends.

Prosecutors say Salzano hid his true managerial role at NRIA to avoid investors looking into his background and finding out that he pleaded guilty in 2006 to five counts of theft by fraud.

According to the indictment against Salzano, he and his cohorts ran an aggressive nationwide marketing campaign that involved thousands of emails to investors; TV, radio and billboard ads; and meetings with and presentations to investors.

Want the latest institutional investment industry news and insights? Sign up for CIO newsletters. 

“Salzano led and directed the marketing campaign, which employed deception, material misrepresentations and omissions, and falsified documents to manipulate investors,” the indictment stated, adding that the “misrepresentations and omissions” were intended to mislead investors into believing that NRIA was solvent and generated significant profits.

“For years, Salzano told lie after lie to investors, continuously deceived them, and operated his business as a Ponzi scheme, through which he stole money from thousands of investors.” U.S. Attorney Philip Sellinger said in a release. “His greed and flagrant disregard for the law caused staggering losses in excess of $650 million.”

The fund provided investors with monthly distributions of between 6% and 10% of their original principal investment on an annual basis, according to the indictment. The investors also received written guarantees from NRIA of an annual return of at least 12% annually for five years, plus a full return of their investment. NRIA also said it would cover any shortfall.

“In reality, NRIA generated little to no profits and operated as a Ponzi scheme, which was kept afloat by new fund investors,” according to the indictment. “Despite investing almost none of their own capital into the business, the defendants misappropriated millions of dollars of investor money to support their lavish lifestyles.”

Salzano also led a separate conspiracy to “obstruct, impede, and impair the IRS” from collecting tens of millions of dollars in outstanding taxes owed by Salzano by, “lying to the IRS, using a web of nominees, opening bank accounts in the names of phony entities, and using false and fraudulent company documents.”

Under his plea agreement, Salzano has agreed to serve a prison term of eight to 12 years, forfeit more than $8.5 million and pay full restitution of $507.4 million to his victims.

SEC Charges Crypto Fund Founders in Nearly $2B Fraud

Asset Management Advisory Firm President Charged by SEC in Massive Fraud

Tags: National Realty Investment Advisors, Nicholas Salzano, U.S. attorney’s office, District of New Jersey, fraud, real estate investment firm, Ponzi scheme

Tags: Fraud, National Realty Investment Advisors, Nicholas Salzano, Ponzi Scheme, real estate investment firm

Malaysia’s sovereign wealth fund, Khazanah Nasional Berhad, announced Monday its assets grew to 85 billion ringgit ($14.1 billion) in 2023, and it generated 5.9 billion ringgit in profit, a significant increase from the 1.6 billion ringgit in profit created 2022.

The information was included in the Khazanah Annual Review 2024. The fund announced it has achieved a compounded annual growth rate of 5.1% since 2004, when it had 33 billion ringgit in assets. As of 2023, the fund held 52.9% of its assets in Malaysian public market equities, 17.2% in global equities, 5.8% in Malaysian private markets, 14.7% in global private markets and 9.4% in real assets. These asset classes returned 1.8%, 9.7%, 6.7%, 5.8% and 10.6%, respectively.

“We delivered a stronger performance in 2023, more than three-fold in profit as compared to FY2022. Our commitment remains, as we continue to leverage our value creation efforts and portfolio rebalancing approach to strengthen our balance sheet and build a resilient financial position,” said KNB Managing Director Dato’ Amirul Feisal Wan Zahir in a statement. “While 2024 is expected to be yet another challenging year globally, with heightened political uncertainties, advancing Malaysia will remain our overarching theme to steer our strategies and actions towards delivering national development and ensuring a sustainable future for Malaysia.”

Last week, KNB also announced the appointment of Datuk Hisham Hamdan as the fund’s new CIO; he started on March 6, succeeding Azmil Zahruddin, who resigned in January 2023.

For more stories like this, sign up for the CIO Alert newsletter. 