West Orange Man Allegedly Bilked Nearly $300M in Ponzi Scheme

A West Orange man scammed more than $275 million in a three-year scheme defrauding hedge funds along with three other men, the U.S. District Attorney's Office in Maryland announced Thursday.

Federal authorities alleged Jonathan E. Rosenberg, 44, of West Orange, along with two other New Jersey men and a Florida man acquired billions in medical debt that hospitals were unable to collect and cooked the numbers to appear attractive for investors.

According to the release, Rosenberg and Livingston resident, Douglas A. Kuber, 53, ran Account Receivable Services, LLC, investing in medical debts with borrowed money from investors. Rosenberg was also president of two other companies that recruited investors for medical accounts.

Authorities alleged more than $25 million was used over a two-year period to purchase 3,872,514 past due patient accounts, totaling more than $4.1 billion. After the two years, the men then started promoting and selling the investments to hedge fudges and individual investors, authorities said.

Richard Shusterman, 50, of Highland Beach, Fla., was also indicted Thursday. Authorities said he was a shareholder and president of International Portfolio Inc., which bought and sold consumer debt as part of the scheme. 

Kuber and Robert Feldman, 65, of Beach Haven, pleaded guilty to conspiracy to commit wire fraud on Tuesday and Oct. 11, 2012, authorities released Thursday. 

“The indictment alleges that the defendants perpetrated a brazen and complex Ponzi scheme that defrauded investors of more than $275 million,” U.S. Attorney Rod J. Rosenstein said.

Shusterman and Rosenberg each face a maximum sentence of 20 years in prison for the conspiracy and for each of the nine counts of wire fraud.

The indictment seeks to recover the $278 million allegedly collected.