Real estate executive charged with defrauding investor using falsified LOI

Real estate executive charged with defrauding investor using falsified LOI

A director at a New Jersey based real estate fund manager has been charged with defrauding an investor. The portfolio manager had sent a misleading letter of intent which was later altered in an attempt to cover it up.

Nicholas Salzano a portfolio manager and senior independent executive director manager, at the time worked at National Realty Investment Advisors (NRIA), a $1.25 billion New Jersey-based investment firm.

According to the complaint, the defrauded investor contacted NRIA after hearing an advertisement on the radio. The investor ultimately purchased $150,000 worth of units in an NRIA fund, in part because she was told each property involved a loan, and therefore each transaction was trustworthy because each lender had performed due diligence.

Later that year the investor was offered a new opportunity to become a joint venture partner with NRIA in a property investment. The minimum investment in this instance was $300,000 and the investor could use her original $150,000 investment toward the $300,000 requirement. The investor sought more information and was sent materials purported to show that NRIA intended to obtain a $25 million bank loan on the property. When the investor asked for more information about the loan the investor was referred to Salzano.

Salzano emailed the investor a signed “letter of intent” (LOI) on the lender’s letterhead with loan terms. The investor contacted the lender to verify the LOI and further investigation revealed the LOI was fraudulent. Salzano subsequently sent an email to the investor saying “ignore this prior email it was sent in error with errant documents attached not stamped as ‘examples only’ of what an LOI looks like . . . . This potential deal is cancelled.” Additionally, Salzano altered his original email to the investor to falsely make it appear as though he was only sending a sample draft of an LOI by adding the capitalized words to his original email: “This took a day to clear release OF A SAMPLE DRAFT OF WHAT IT COULD LOOK LIKE FOR A LENDER LIKE [Lender Name] on but it’s a great project and a great loan.” Salzano later described the LOI as a “mistake” and attempted to cover up the fraud with altered versions of the LOI (omitting the doctored signature page).

Ultimately, NRIA returned the investor’s $150,000 investment but attempted to dissuade her from removing the money.

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