Teaneck Man Admits Committing $200K Fraud While on Bail for Separate Scam

A 33-year-old Teaneck man pleaded guilty Wednesday in Newark federal court to scamming a New York City bank and two individuals out of more than $200,000 while free on bail for a separate multi-million dollar swindle, federal prosecutors said.

Moshe Butler admitted to accusing him of defrauding Morgan Stanley Smith Barney out of around $37,417 by first opening an investment account with the bank that allowed immediate access to funds deposited by check, prosecutors said. He first deposited a $50,000 check in the account, but burned through the money on largely failed securities and commodities option contracts.

After losing the initial $50,000 and an additional $18,921, Butler deposited a $100,000 check from a closed bank account he solely controlled into the Morgan Stanley account to cover the negative balance. That account had already been closed because prosecutors said Butler wrote a dozen bad checks.

Prosecutors said Butler knew the account was closed, but took advantage of the Morgan Stanley account allowing him immediate access to funds deposited by check.

He also admitted to scamming two individuals, identified only by the initials D.B. and C.W., out of $107,755 in money and legal services between November 2011 and March 2012, and writing them a series of bad checks.

Butler committed his high-priced bad check scheme while awaiting trial in another fraud he carried out between 2008 and 2009, according to prosecutors. He pleaded guilty in December to scamming hotel and motel developers by collecting $1.7 million in payments for flat panel televisions he never delivered.

The bank fraud charge carries a maximum 30 year prison sentence and up to $1 million in fines. Because Butler committed the crime while on pretrial release, he faces a statutory 10 year prison term added to his sentence. A sentencing date has not yet been scheduled.

Butler, a part-time Florida resident, was described in a June 2011 newspaper article as the founder of a rehab center catering to people of Jewish faith.

"I was leading a double life, and gambling was my mistress," Butler, reportedly a former hedge-fund manager who was in rehab, told the Palm Beach Post.

It was not clear if the center was still operating and a listed phone number was disconnected.

Butler’s defense attorney, Edward J. Dauber, did not respond to a message seeking comment. 

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