A disgraced former Brooklyn Supreme Court justice and a shady real estate developer scammed investors in a $6.5 million scheme and pocketed nearly all the cash, federal prosecutors claim.
Ex-Judge Edward Harold King, who was forced to resign earlier this year amid a slew of fraud claims, set up a phony escrow account in cahoots with developer Sam Sprei to bilk two investors out millions of dollars tied to bankrupt property in New Jersey, federal prosecutors said Wednesday.
King and Sprei allegedly reneged on the deal when the investors tried to pull out — and only got a fraction of the money they had plunked down, according to the feds.
“As alleged, the defendants stole millions of dollars from investors by cynically leveraging King’s position as a sitting judge to lend false legitimacy to supposed investment opportunities,” Joseph Nocella, US Attorney for the Eastern District of New York, said in a statement.
“Today’s arrests demonstrate that this Office will hold accountable those who exploit victims for their own financial gain,” Nocella said. “Holding corrupt individuals accountable for the abuse of public trust will always be a priority of our office.”
According to prosecutors, Sprei — who also goes by “Yechiel Sprei,” “Shimon Sprei,” and “Eli Shapiro” — allegedly set up the scam in November 2024 by offering the investors a shot at property in Freehold, New Jersey, that was mired in bankruptcy and up for auction.
However, Sprei allegedly said the pair had to plunk down $6.5 million to get a shot at the deal, and promised they would get the money back if they decided to pull out — with the money to be held in an escrow account in King’s name until then, the feds said.
When the investors asked for their money back last year, King and Sprei came up with phony excuses and only returned about $1.5 million — pocketing the rest, according to a federal complaint.
King was already in hot water, and resigned from the bench in January amid multiple claims that he helped defraud investors out of more than $11 million — opting to quit rather than cooperate with a probe.
Ensnared in that scandal was former Brooklyn party boss Frank Seddio, whose pull in political circles gave him influence over judicial appointments.
Seddio was accused of being a “con artist” who used his clout to bilk investors out of $2 million, according to a federal lawsuit filed against the fallen party boss in October.
Meanwhile, federal civil claims tied to the New Jersey property case are still pending.
“We are going to monitor the criminal case and continue to pursue our clients’ civil remedies,” attorney Tab Keith Rosenfeld, who represents the defrauded investors, told The Post Wednesday.
King and Sprei are due to be arraigned in Brooklyn federal court on the criminal case later on Wednesday.
The FBI and IRS conducted the joint investigation that led to federal indictment.
“Fraud that hides behind a veneer of legitimacy — especially the authority of a judge — strikes at the heart of public trust,” IRS New York Special Agent in Charge Harry Chavis said in a statement.
“IRS‑[Criminal Investigations] will relentlessly follow the money, expose deception, and ensure that those who manipulate and mislead investors are brought to justice,” he said. “Today’s arrests send a clear message: schemes dressed up as opportunity will not shield wrongdoers from accountability.”
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