View Site in:

Press Releases

Cyrus R. Vance, Jr.

District Attorney, New York County

For Immediate Release
November 21, 2012


Manhattan District Attorney Cyrus R. Vance, Jr., today announced the sentencing of JOSEPH GREENBLATT, 50, to 6-to-18 years in state prison for stealing more than $31 million from investors by operating a Ponzi scheme through his company, Maywood Capital (“Maywood”). GREENBLATT also must pay $31 million in restitution to the victims. The defendant pleaded guilty on September 27, 2012 to Grand Larceny in the First and Second Degrees, Criminal Violation of the Martin Act, Tax Fraud, and other related crimes.

“Crimes committed in office suites are often as serious as those committed on city streets,” said District Attorney Vance. “Ponzi schemes harm individuals who lose their savings, and also hurt the integrity of our financial markets. My Office will continue to seek prison sentences, where appropriate, for defendants who steal from investors.”

According to the defendant’s guilty plea, documents filed in court, and statements made on the record in court, GREENBLATT operated Maywood, a real estate investment company originally based in New Jersey, and later in Manhattan. GREENBLATT’s co-defendants in the case, PETER VOGEL, 74, and JOSEPH MONGELLI, 48, both New Jersey attorneys, assisted GREENBLATT in the Ponzi scheme. They initially served as outside counsel to Maywood, but VOGEL became an employee of Maywood after he was disbarred for misappropriating client funds in 2000.

Between October 27, 1995 and December 9, 2004, GREENBLATT solicited individuals, many of whom were retirees living in Florida, to invest large sums of money through Maywood. He advertised in local Florida newspapers to attract many of these investors. GREENBLATT told the investors that Maywood would use their funds to acquire, renovate, and then sell real properties, located primarily in Manhattan, and that individual corporations would be established for each property. GREENBLATT also told the investors that their investments were secured by recorded, first mortgages specific to the properties into which their funds were being invested.  

In reality, however, only some of the funds were secured by any mortgage at all. Where mortgages did exist, they were often not first mortgages, and none of the mortgages ever specified that the investor was the mortgagor. This left the investment wholly unsecured and left the investors without any apparent claim to the value of the property. On many occasions, Maywood had no ownership interest at all in the properties.

Throughout the scheme, GREENBLATT diverted a large portion of the funds he received from investors to himself and his family. He also used some of those funds to make several million dollars in restitution payments owed under a separate criminal conviction against him in Brooklyn Supreme Court.

On the occasions when Maywood acquired and later sold properties, GREENBLATT instructed VOGEL and MONGELLI to release only some of the amounts due to the investors, and not the full amounts to which they were entitled. In 2002, GREENBLATT began giving investors post-dated checks so that each investor could deposit the checks when the interest on their investments came due. GREENBLATT, however, knew that the Maywood accounts did not hold sufficient money to fund the amounts due, and therefore, that the checks were worthless. He also knew that other checks he gave to investors for the return of their investments and for the payment of interest on the investments would not be honored because Maywood’s accounts did not hold sufficient funds. On many occasions, he falsely told investors that their checks had been dishonored because Maywood had switched bank accounts.

When investors demanded return of their principal, in most cases, GREENBLATT simply did not give it to them. Instead, he often convinced investors that he needed new funds to address immediate cash-flow problems, and those new funds would allow him to conclude transactions that would enable him to pay investors their principal.

In addition, on or about December 2002 and October 2005, GREENBLATT filed personal income tax returns with the State of New York for the 2001 and 2004 tax years, respectively, both of which substantially understated his true tax liability. He also filed no personal income tax returns at all for the 2002 and 2003 tax years. The New York State Department of Taxation and Finance determined that, exclusive of interest and penalties, he owed at least $442,071 in unpaid taxes for the tax years 2001 through 2004.  

VOGEL and MONGELLI have both pled guilty to felony charges in connection with GREENBLATT’s scheme.

Assistant District Attorneys Michael Kitsis and Andrew Seewald handled the prosecution of this case, under the supervision of Assistant District Attorneys Christopher Conroy and Judith Weinstock, Deputy Chiefs of the Major Economic Crimes Bureau, and Assistant District Attorney Polly Greenberg, Chief of the Major Economic Crimes Bureau. Trial Preparation Assistant Britney Nagle and Senior Investigative Analyst James MacFayden provided assistance on the case.

Defendant Information:

Queens, N.Y.

•    Grand Larceny in the First Degree, a class B felony, 6 counts
•    Grand Larceny in the Second Degree, a class C felony, 7 counts
•    Securities Fraud, a class E felony, 14 counts
•    Scheme to Defraud in the First Degree, a class E felony, 1 count
•    Offering a False Instrument for Filing in the First Degree, a class E felony, 2 counts
•    Violation of Tax Law, a class E felony, 2 counts

•    6-to-18 years in prison
•    $31 million restitution