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Real Estate Investor Who Fled Country Now Seeks to Raise $1 Billion in IPO

United Realty Trust Incorporated is seeking up to $1 billion of capital from investors in an initial public offering (IPO). Deep inside the prospectus on pages 89 and 90 is a startling disclosure about Eli Verschleiser, its President and member of its Board of Directors:

At the age of 17, while a high school student, Eli was subpoenaed to appear before a federal grand jury inquiring into the fraudulent activities of a group of individuals he knew. Eli exercised his Fifth Amendment rights and continued to do so after being given “use immunity.” Eli appeared before a federal judge who directed him to reappear. He did not reappear and, instead, moved overseas, where he remained for several years. While overseas, a federal indictment was unsealed naming over 20 individuals in connection with fraudulent activities, including Eli. Approximately two years later, his family contacted an attorney to help him return to the country. He eventually pleaded guilty to one count of failure to appear, a misdemeanor. He received one-year probation and 100 hours of community service as a sentence. The charges against him related to the fraudulent activities were dismissed.

The disclosure does not call Eli Verschleiser a fugitive. Did Verschleiser conveniently move overseas after being directed to “reappear” in front a federal judge? Where did he go? Who were the characters that he was involved with? Why did he wait over two years before returning to America? As of the time of this publication, his biography on the company's website makes no mention of the above incident.

Eli Verschleiser
A blind pool offering or a blind trust offering?

United Realty Trust’s effort to raise capital is known as a “blind pool offering” since it does not own any properties and has not yet identified any properties for investment. The "sponsor" of the offering is United Realty Advisor Holdings LLC. It is directly and indirectly controlled by Eli Verschleiser and Jacob Frydman. The sponsor indirectly controls United Realty Advisors LP which is the "advisor" and is responsible for managing day-to-day operations and identifying property for investment.

According to the prospectus, a couple of Frydman's entities went bust:

In February 2004, Mr. Frydman was chief executive officer of the general partner, and a 1% owner, of two entities which, while engaged in separate land development transactions, each filed petitions for relief under Chapter 11 of the United States Bankruptcy Code.

The prospectus cautions that:

We and our advisor have no operating history, we have no established financing sources, our sponsor has no experience operating a public REIT, and the performance of the prior real estate investment programs of the principals of our sponsor may not be indicative of our future results.

Furthermore, the prospectus warned that:

You may be more likely to sustain a loss on your investment because our sponsor does not have as strong an economic incentive to avoid losses as does a sponsor that has made significant equity investments in its company.

Instead of calling it a blind pool offering, maybe it should be called a blind trust offering?

Closing comment

Eli Verschleiser has "no experience operating a public REIT." He should understand that it is normal for him to be the subject of extra public scrutiny if he plans to take United Realty Trust Public. He shouldn’t hide behind nuanced language buried deep inside of a prospectus. The way that I learned to deal with my past transgressions is to be completely upfront about them. Hopefully, Verschleiser has learned from his youthful errors.

Written by:

Sam E. Antar


I am a convicted felon and a former CPA. As the criminal CFO of Crazy Eddie, I helped my cousin Eddie Antar and other members of his family mastermind one of the largest securities frauds uncovered during the 1980's. I committed my crimes in cold-blood for fun and profit, and simply because I could. If it weren't for the heroic efforts of the FBI, SEC, Postal Inspector's Office, US Attorney's Office, and class action plaintiff's lawyers who investigated, prosecuted, and sued me, I would still be the criminal CFO of Crazy Eddie today.

There is a saying, "It takes one to know one." Today, I work very closely with the FBI, IRS, SEC, Justice Department, and other federal and state law enforcement agencies in training them to identify and catch white-collar criminals. Often, I refer cases to them as an independent whistleblower. I teach white-collar crime classes for various government entities, professional organizations, businesses, and colleges and universities. More recently, I've helped the AICPA Fraud Task Force develop better methods for detecting fraud. I do not want or seek forgiveness from my victims for my vicious crimes. My past sins are unforgivable.

I no financial relationship with United Realty Trust Inc. or any of its affiliates.


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