Spongetech Delivery Systems, Inc. (fka SPNGQ)

[dalessan]

Atty Cops Plea In Extortion Case Tied To Pump-And-Dump
By Stewart Bishop

Law360, New York (June 12, 2019, 8:34 PM EDT) -- A Long Island personal injury attorney on Wednesday admitted to taking part in what prosecutors say was a scheme by a convicted securities fraudster to try to extort $7 million from a former co-defendant and launder the funds through a religious charity. 

At a morning hearing before U.S. District Judge Dora Irizarry in Brooklyn, Mark "Meyer" Weissman, 55, of Lawrence, New York, copped to conspiring to obstruct an official proceeding, namely, the enforcement of a $12.7 million restitution order against Weissman's friend Andrew Tepfer, who was convicted along with several others of a $21 million pump-and-dump scheme involving Spongetech Delivery Systems Inc.

Prosecutors say Tepfer enlisted Weissman, along with Queens rabbi Igal Haimoff, to aid him in a plot to shakedown former Spongetech Chief Financial Officer Steven Moskowitz. Tepfer used Weissman as a go-between to convey a threat to Moskowitz that Tepfer would go to the authorities with unspecified incriminating information if he wasn't paid as much as $7 million, according to the government.

"I'm sorry for getting involved in this at all," Weissman told Judge Irizarry. "It was wrong for me to seek to help a friend by violating the law."

Prosecutors and Weissman's lawyers estimate he's facing an advisory sentencing guidelines range of six to 12 months in prison. However, Judge Irizarry, who has final sentencing authority, wondered aloud whether a downward adjustment to the guidelines for playing a minor role was warranted and noted the lack of an upward adjustment for abuse of a position of trust.

Weissman waived his appeal rights as long as any term of imprisonment imposed is a year or less.

Prosecutors say Moskowitz told the FBI in February 2017 that Weissman approached him and said Tepfer wanted $1 million or he would go to the authorities with incriminating information. The demand eventually rose to $7 million, according to the government.

Moskowitz, who with Tepfer is jointly and severally liable for the $12.7 million in restitution from the pump-and-dump case, exchanged texts and had a series of recorded meetings and phone calls with Weissman in which they talked about how to transfer the money without it being diverted to satisfy the judgment.

Settling on a purported plan to have Moskowitz transfer the money through associates in Switzerland, Tepfer — who has pled not guilty — is said to have recruited rabbi Haimoff to funnel the cash through his charity, under the guise of a donation to fund the construction of a yeshiva.

As part of the alleged rouse, Weissman and Haimoff — who in February copped to money laundering conspiracy — crafted fake communications that were exchanged with Moskowitz's "Swiss" contact, who was actually an undercover FBI agent, according to the government.

An attorney for Weissman, Henry Mazurek, declined to comment after the plea hearing.

In a statement, the U.S. Attorney for the Eastern District of New York, Richard P. Donoghue, said Weissman attempted to impede restitution for victims of a massive fraud.

"This office will vigorously prosecute corrupt attorneys who assist in violations of the law," Donoghue said.

Weissman is due to be sentenced on Nov. 4.

Tepfer dodged any prison time for the underlying Spongetech fraud case, but was ordered to be held jointly and severally liable for the $12.7 million restitution order. He is currently in custody for violating the terms of his bail in the current case, and potentially faces further penalties for violating his probation.

The government is represented by Nathan Reilly of the U.S. Attorney's Office for the Eastern District of New York.

Weissman is represented by Henry E. Mazurek and Evan Lipton of Meister Seelig & Fein LLP.

The case is U.S. v. Haimoff et al., case number 1:18-cr-00524, in U.S. District Court for the Eastern District of New York.

--Additional reporting by Pete Brush. Editing by Michael Watanabe.
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