Judge freezes assets of man accused in $630,000 fraud

He's suspected of putting money to personal use

April 13, 2004|By Andrea K. Walker | Andrea K. Walker,SUN STAFF

A federal judge has frozen the assets of a Baltimore man who is accused of bilking investors of $630,000 in an illegal commodities-trading venture and using part of the money to pay his mortgage and his daughter's college expenses.

U.S. District Judge Richard D. Bennett acted Thursday in the case of Andrew Silberstein, who is facing civil charges filed by the U.S. Commodity Futures Trading Commission and the Maryland securities commissioner.

The civil complaint, filed March 5, charges Silberstein with nine counts of violations of the federal law regulating commodities, and violations of Maryland securities laws. It seeks restitution, disgorgement of profits and civil penalties.

Silberstein, whose address is listed in the complaint as Szold Drive in Northwest Baltimore, is also accused of operating as a commodity pool operator without registering. He did not return phone calls yesterday.

The complaint alleges that Silberstein collected $630,000 from at least seven investors between December 2000 and October last year to invest in a commodity pool that would invest in S&P 500 futures.

Silberstein solicited longtime friends, fellow members of a Baltimore County synagogue where he was a cantor and from associates at his musical activities, the complaint said.

"In the course of social conversation, defendant made it known to potential investors that he had great success in trading S&P 500 futures contracts," the complaint said. "Defendant offered to share his success with these people by trading in S&P futures contracts. ... "

Silberstein allegedly visited some prospects at home, showing them software and explaining his trading strategy.

In one case, Silberstein raised $400,000 from a friend and business associate in New York over a six-month period last year. When that investor asked for Silberstein's overall six-month investment performance, Silberstein sent him figures showing returns ranging from 8.57 percent to 45.3 percent, the complaint said.

He also is accused of sending the investor fabricated account statements, including one that showed a balance of more than $1.1 million when the amount in the account was less than $27,000.

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