Thomas Nicholas Salzano, aged 65 and the former head of a New Jersey-based development firm, has pleaded guilty to charges of securities fraud and conspiracy in connection with a Ponzi scheme amounting to $658 million. The scheme, orchestrated through National Realty Investment Advisors (NRIA) based in Secaucus, N.J., promised investors market-beating returns on real estate ventures that were minimally profitable. U.S. Attorney Philip R. Sellinger stated that Salzano, acting as the “shadow chief executive” of NRIA, continuously deceived investors, operated the business as a Ponzi scheme, and caused substantial financial losses through his greed and disregard for the law.
As part of his guilty plea, Salzano agreed to a prison term of eight to 12 years and to pay $516 million in forfeitures and restitution. His attorney, Henry E. Klingeman, mentioned that opting for a guilty plea was a sensible decision to avoid a prolonged trial. Salzano is scheduled for sentencing on August 6, where he intends to provide the court with an explanation in the pursuit of a fair outcome.
Salzano was indicted in October 2022, along with NRIA President and CEO Rey E. Grabato II, for their involvement in defrauding over 2,000 investors. Prosecutors asserted that Grabato’s leadership position at NRIA was largely titular, while Salzano concealed his actual control of the company to evade investor scrutiny regarding a history of fraudulent activities.
Rey E. Grabato II, a key figure in the Ponzi scheme involving National Realty Investment Advisors (NRIA), is currently a fugitive believed to be in the Philippines, as stated by prosecutors in a recent court filing. Attempts to reach Grabato’s attorney, as identified in court documents, have been unsuccessful.
Alongside Grabato, Thomas Nicholas Salzano and other NRIA executives faced indictment in a separate civil action initiated by the Securities and Exchange Commission (SEC). The SEC proceedings were paused during the criminal case, which was slated to commence next month prior to Salzano’s guilty plea.
NRIA, the entity at the center of the Ponzi scheme, filed for Chapter 11 bankruptcy protection in June 2022, with the bankruptcy proceedings ongoing.
The scheme involved NRIA enticing investors with promises of substantial returns through development projects along the East Coast, advertised extensively on national broadcast platforms like Fox News and Bloomberg Radio. Despite claims of high returns, prosecutors revealed that NRIA generated minimal profits and operated as a Ponzi scheme, relying on new investors to sustain its operations.
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