A Community Fraud Revisited

It’s been a long-drawn-out saga for literally hundreds of people who invested small, medium, and large sums of money with Aaron Fischman of Woodmere for at least two reasons. The first is that the idea for his business seemed plausible. The second is his reputation for philanthropy as a member of the 5 Towns community.

No one in his right mind thought they would lose every dollar they invested with him totaling tens of millions of dollars.

The New York State Attorney General says it was over $70 million. Fischman was ultimately indicted for stealing $22 million and in the end, three years ago he pleaded guilty to taking $13.7 million from average, unassuming people—mostly here in Nassau County.

For over a year, I ran a free public service announcement from the AG’s office urging people to come forward if they had been victimized by this wanton, heartless fraud. I heard from over one hundred people who said they lost anywhere from $25,000 to $10 million.

In the interim, a combination of good fortune and competent attorneys resulted in Fischman pleading guilty and being sentenced to repay New York State $2 million over three years. The first million was paid by another fairly new Fischman investor, Heshy Marcus of Boston. There was no jail time attached to the decision. People who were egregiously hurt by Aaron would have preferred having their money returned. A jail sentence would have been the second choice for many. Now, three years later, Aaron has been jailed.

The entire matter has now come to the fore because Fischman was arrested last week for, among other things, failing to pay his second million on December 15th as required by his sentence. He was remanded for violating his Condition of Discharge and is being held in East Meadow, Long Island at least until January 30, with a hearing to be held on January 16 to deal with the disposition of the case. According to the sentencing guidelines, Fischman can be sentenced up to 7 years in prison for violating his Condition of Discharge.

It’s important that we bring this case to the public’s attention (as we have in the past, with rabbinical guidance) because of the worrisome pattern of behavior that has emanated in which frum (Orthodox) financiers have displayed a proclivity to induce other frum people to invest large sums of money. And in many cases, the unsuspecting public does not realize that the plan from the start was that the money would not just be lost (which can happen under legitimate circumstances), but as the Fischman case and other cases since then show, that the money was never invested to begin with, but used by these so-called financial geniuses to enrich themselves and fund their lavish lifestyles.

The court transcript from last week’s hearing in a Mineola courtroom reiterates that Fischman was convicted of taking over $13 million from innocent victims and simply absconding with the money. The transcript also says that Fischman’s wife, Nina, used about $3 million of the money for luxury shopping and the use of limousines for travel. The NYS Attorney General’s office informs us that they have a separate judgement against Nina Fischman for $4 million.

So, law enforcement has established that Fischman and his Cardis fraud took between $13 and $22 million mostly from observant Jewish families in the Five Towns, though he was not at all geographically limited.

One person who he davened with at Chabad of the Five Towns in Cedarhurst had the misfortune of sitting next to Aaron in shul and “investing” or actually giving him $3 million of which none has ever been recovered. So evil and crooked was this scam that Aaron convinced his seatmate in shul to take him to South America where the victim’s parents were Chabad shluchim. Once there, Aaron managed to squeeze $650,000 out of local business people. All funds that, at the end of the day, were lost.

So, what happened last week that resulted in Aaron Fischman now occupying a Long Island prison cell? The fact is that Fischman was several days past his due date for his final payment of $1 million to the state. He had apparently returned the week before from Israel and figured that just showing up in court to explain his late payment was the right thing to do short of making that payment.

As it turns out, when you’re under a conditional discharge, as he was, according to the verdict rendered in 2022, you should be aware that when the payment is due, it’s due.

Fischman’s attorney believed he could do what Aaron had been doing all these years: playing fast and loose with the truth. Turns out that in a courthouse and in front of a judge is not exactly the best place to do that routine. On that basis, Fischman was arrested. And based on his recent return from Israel and several trips to Israel since 2022, the Attorney General’s office determined that Fischman was an imminent flight risk and locked him up.

It is by no means a pleasant situation. And it is difficult, if not downright uncomfortable to compare the losses and pain Aaron Fischman has inflicted on so many victims by taking their money to the pain and discomfort of his being jailed which, sadly, is something that is common among degenerates and not something our community is accustomed to, though there are unfortunately similar if not worse cases than this one in communities similar to ours.

The reactions from those familiar with this latest development vary. Some say Fischman did awful things to so many people and deserves to be imprisoned; others agree that he needs to make restitution, but feel that imprisonment now or in the near future is unwarranted.

Someone reacted by saying: “What do you have from Aaron being in jail?” It’s a fair question, but no one on the outside, whether a victim or just those on the sidelines, can do anything about it as it is just the law. Over the next month there will be hearings on the case with the possibility, according to court documents, of Fischman facing up to seven years or more in prison.

The reality is that this article about Fischman’s arrest was ready to be published last week. However, we passed the story around to a few people for fact-checking, and as the story “got around,” the pressure began to build up from a few corners not to print it. The encouragement we got to print it far outweighed those in Fischman’s corner.

A source with inside knowledge on the case said that Aaron was taking money from people for fake investments up until the day he was arrested.

The fact is that he owes a lot of people a great deal of money. In fact, many millions. My interest in the case (in the interest of full disclosure) is that I and a few people in my office about ten years ago “invested” in Fischman’s scam and lost a lot of money. Fischman’s office was down the hall from the 5TJT, and he often davened Minchah in our office.

Additionally, an attorney representing an investor that lost millions told me this week: “What many people don’t realize is that even after his conviction, Aaron never stopped engaging in the same conduct he was involved in at Cardis. He continued raising money, routing it through attorney escrow accounts, and misappropriating it right up until he was incarcerated last week. For that reason alone, he needs to remain in jail. He is showing that he is a continued danger to the public.”

Cardis’ in-house counsel, up until the other shoe dropped a few years ago, was Cedarhurst resident Larry Katz. A few years ago, an investor subpoenaed Katz’s bank records, of which I have a copy, and it showed that Katz paid himself between $800,000 and $1.5 million over a short period of time. It also shows how millions of dollars were transferred to the personal accounts of Aaron, his wife, Nina, their children, and his in-laws.

As to Katz—the man who facilitated this huge fraud—his whereabouts are unknown. There are rumors that he moved to Israel, while others say Florida. The hope is that if the case is reopened, we will find out how an attorney violated his fiduciary duty and so wantonly mishandled other people’s money.

An additional interesting dynamic to this story is that since I began writing about the Cardis fraud about six years ago, several people in different Jewish communities called or wrote to me saying that there are similar rip-off scams taking place in their communities as well, and asked if I would be interested in writing about them.

Two calls came from people in South Florida, who described different types of scams from various angles. One was a Ponzi scheme while another was much more complex. The one thing that these two situations have in common is that frum people stole millions from other mostly frum people. This is not the time or place to go into detail and name names in the interest of protecting potential victims. That day will come soon.

In terms of the Fischman family, his children are adults today and I think most of them have their own families, so at least that’s good. When I started writing about the Fischman-Cardis rip off, some of his kids were in high school and one complained to his rebbe in yeshiva about how his father was being written about in the media, not just in this paper, but also in the New York Post and The New York Times.

In one of the articles I wrote, I referred to Aaron as a “scoundrel.” His Rebbe asked me why I had to use a word like scoundrel to describe him. I told the Rebbe to look up the meaning of the word scoundrel in the dictionary to see how it defines a scoundrel as a “dishonest and unscrupulous person.” I told the rabbi that it was the perfect description considering what Aaron Fischman had done to people.

I told him that I felt bad the teenager was so bothered by the description of his father in the paper, but it would have been more appropriate if he had complained to the father about his conduct and glaring lack of moral principles. Our one conversation wasn’t going to change the fact that Aaron Fischman took millions of dollars from people with no intent of doing anything other than using it to fund his own lavish lifestyle.

The number of calls I received after the article was published seemed endless at the time. One man from Florida called me once a month to find out if the case was going anywhere and whether there was a chance of him recovering his money. A woman from Queens also called every few weeks telling me that her husband gave Aaron $300,000 in cash and wanted to know if I knew whether she could get the money back. I asked her if it was green cash and she said it was and at the time I felt that I knew enough about the case that the possibility of her recovering that money was non-existent.

I know one person whom Aaron talked into having his elderly mother invest $150,000 with him so she would have money to live on. When a few years passed and there was no return on the money, the woman’s son began to press Aaron about returning the money or at least paying some of the alleged income on the investment. Aaron told him to tell his mother that the money would be part of her “yerusha.”

So far, several other lawsuits against Aaron and Nina and in some cases their children have been successful. The Fischmans lost their apartment in Israel, valued at $5 million, and two homes they owned upstate. Their Woodmere home is in foreclosure. It’s a sad and pathetic situation. All he had to do was refrain from stealing so much money from so many people.

After Fischman missed his payment date on December 15, it was just a matter of time before the law descended on him. When Aaron walked into the courtroom on December 17, he probably thought he could spin them a story like he had so many other times and they would buy it. They didn’t.

According to the court transcript, his attorney requested a 5-month payout of the one million dollars. The fact that he had three years to come up with the money, and didn’t, and was an imminent flight risk is what put him in jail.

It’s a lot of years later and people still want their money back. Maybe Aaron can think about where that money is while he’s in his prison cell. At least while he’s in there, he can’t harm any more unsuspecting, trusting people. Let’s hope the Attorney General’s office understands that.

Read more of Larry Gordon’s articles at 5TJT.com. Follow 5 Towns Jewish Times on Facebook, Instagram, and Twitter for updates and live videos. Comments, questions, and suggestions are welcome at 5TJT.com and on Facebook, Instagram, and Twitter.