Three Men Arrested For Promising Pre-IPO Facebook Shares To Lure Investors

Three men were arrested at their homes Tuesday and charged with bilking an investor, dangling special access to Facebook shares prior to the social network’s initial public offering as bait.

Three men were arrested at their homes Tuesday and charged with bilking an investor, dangling special access to Facebook shares prior to the social network’s initial public offering as bait.

Forbes reported that federal officers with the FBI and the Internal Revenue Service arrested Eliyahu Weinstein, 37, of Lakewood, N.J.; Alex Schleider, 47, also of Lakewood; and Aaron Muschel, 63, of Brooklyn, N.Y.

According to Forbes, Weinstein is currently awaiting sentencing by U.S. District Judge Joel A. Pisano after a grand jury in Newark, N.J., returned a 45-count Indictment against him Oct. 27, 2011, charging him with running a massive Ponzi scheme from 2004 through 2011 that resulted in approximately $200 million in investor losses.

Weinstein, Schleider, and Muschel were not the only ones to use nonexistent pre-IPO Facebook shares to lure unsuspecting investors, as Florida finance manager and former Oregon gubernatorial candidate Craig Berkman is facing fraud charges from the Securities and Exchange Commission’s enforcement division on similar charges.

Readers: Were you or anyone you know offered Facebook shares prior to last year’s IPO?

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