Leader of real estate investment firm sentenced to 12 years in prison for role in $658 million Ponzi scheme and multimillion-dollar tax evasion conspiracy

Date: Nov. 12, 2024

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Newark, NJ - The shadow chief executive officer of National Realty Investment Advisors LLC (NRIA) was sentenced today to 144 months in prison for orchestrating a scheme to defraud more than 2,000 investors in a $658 million Ponzi scheme and conspiring to evade millions of dollars in tax liabilities, U.S. Attorney Philip R. Sellinger announced.

Thomas Nicholas Salzano, aka "Nicholas Salzano," of Secaucus, New Jersey, previously pleaded guilty 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 admitted to misappropriating millions of dollars from investors to enrich himself and his family and friends. Salzano also admitted to misappropriating millions of dollars from investors to enrich himself and his family and friends and failing to report and pay taxes on those misappropriated funds. Judge Padin imposed the sentence today in Newark federal court.

"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. 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."

U.S. Attorney Philip R. Sellinger

"Salzano trampled on the trust that his clients placed in him to invest their money prudently but instead he stole their investments for his own self-enrichment through his atrocious scheme which resulted in the theft of over $650 million," said Harry Chavis, Jr., Special Agent in Charge of the Internal Revenue Service Criminal Investigation, Boston Field Office. "Today's sentencing of Salzano should send a message to others who choose to prey on innocent victims through similar investment fraud schemes that IRS - Criminal Investigation and our law enforcement partners are committed to pursuing justice for all Americans that are victimized by these schemes. Salzano's clients were not the only victim of this scheme, every American taxpayer was also victimized by Salzano when he failed to pay tens of millions of dollars in taxes which would have funded local schools, infrastructure projects, and social programs for those in need."

According to documents filed in this case and statements made in court:

From February 2018 through January 2022, Salzano and others defrauded investors and potential investors of NRIA Partners Portfolio Fund I LLC (the "Fund"), a real estate fund operated by NRIA, of $650 million through lies, deception, misleading statements, and material omissions. 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, Judge 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.

U.S. Attorney Sellinger credited special agents of IRS Criminal Investigation (IRS-CI), 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.

IRS-CI is the criminal investigative arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft and more. IRS-CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, obtaining a more than a 90 percent federal conviction rate. The agency has 20 field offices located across the U.S. and 12 attaché posts abroad.