The former “shadow chief” of the now defunct National Realty Investment Advisors (NRIA) in Secaucus received a 12-year prison sentence for running a $568 million Ponzi scheme, which led to a multi-million dollar tax evasion conspiracy, authorities said.
By John Heinis/Hudson County View
Thomas Nicholas Salzano, also known as Nicholas Salzano, 66, of Secaucus, pleaded guilty in October 2022 before U.S. District Judge Evelyn Padin to securities fraud, conspiracy to commit wire fraud, and conspiracy to defraud the United States.
Salzano admitted he made numerous misrepresentations to investors while he secretly ran NRIA behind the scenes.
He also confessed to misappropriating millions of dollars from investors to enrich himself and his family and friends, well as misappropriating millions of dollars – which didn’t report or pay taxes on – from investors to enrich himself and his family and friends.
Padin imposed the sentence today in Newark federal court yesterday.
“For years, Salzano, operating from the shadows to conceal his prior history of fraud, 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 in order to support his lavish lifestyle,” U.S. Attorney Philip Sellinger said in a statement.
“His greed and flagrant disregard for the law caused staggering losses in excess of $650 million. This office will continue to prioritize prosecuting individuals, like Salzano, who engage in rampant fraud to ensure they are held accountable with long jail sentences and are ordered to make their victims whole.”
From February 2018 through January 2022, Salzano and others defrauded investors and potential investors of NRIA Partners Portfolio Fund I LLC, a real estate fund operated by NRIA, of $650 million through lies, deception, misleading statements, and material omissions, court documents show.
These included the financial position of NRIA, the manner in which the defendants and their conspirators used Fund investor money, and Salzano’s managerial role at NRIA and his history of fraud.
Salzano and his conspirators executed their scheme through an aggressive multiyear, nationwide marketing campaign that involved thousands of emails to investors; advertisements on billboards, television, and radio; and meetings and presentations to investors.
Salzano led and directed the marketing campaign, which employed deception, material misrepresentations and omissions, and falsified documents to manipulate investors, which were intended to mislead Fund investors into believing that NRIA was a solvent business that generated significant profits.
In reality, NRIA generated little to no profits and operated as a Ponzi scheme, which was kept afloat by new investors.
Despite investing almost none of his own capital into the business, Salzano misappropriated millions of dollars of investor money to support his lavish lifestyle, including expensive dinners, extravagant birthday parties, and payments to family and associates who did not work at NRIA.
Salzano concealed his true managerial role at NRIA in an effort to avoid scrutiny from investors of his history of fraud at a large telecommunications company.
In addition to defrauding investors, Salzano orchestrated a separate, but related, conspiracy to avoid paying taxes on his misappropriated funds.
In addition to the prison term, Padin sentenced Salzano to three years of supervised release. As part of his plea agreement,
Salzano has agreed to a forfeiture money judgment of $8.52 million, full restitution of $507.4 million to the victims of his offenses, and has agreed to pay $6.46 million to the IRS.
The New Jersey Bureau of Securities issued a cease and desist to NRIA in June 2022, and as of December of last year, investors were still seeking refunds, as HCV exclusively reported.
The following day, a former NRIA vice president was charged by the New Jersey Attorney General’s Office for fraudulently selling $2.35 million in unregistered securities from a separate group he founded, using investors funds for his own benefit.
Sellinger credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Chavis in Boston; and special agents of the FBI, under the direction of Acting Special Agent in Charge Nelson I. Delgado in Newark, with the investigation, with assistance from FBI Headquarters Criminal Investigative Division.
The government is represented by Assistant U.S. Attorneys Jonathan Fayer, Lauren E. Repole, and John Mezzanotte, of the U.S. Attorney’s Office’s Criminal Division, and Trial Attorney Samuel Bean of the U.S. Justice Department’s Tax Division.
