A disgraced former Brooklyn Supreme Court justice and a shady real estate developer scammed investors in a $5 million scheme and pocketed nearly all the cash, federal prosecutors claim.
Ex-Judge Edward Harold King, who was forced to resign earlier this year due to a spate of fraud allegations, set up a phony escrow account in collusion with developer Sam Sprei to defraud two investors out of millions of dollars related to bankrupt property in New Jersey, federal authorities said Wednesday.
According to a federal criminal complaint released Wednesday, King and Sprei reportedly reneged on the arrangement when the investors attempted to withdraw, receiving only a portion of the money they had invested.
“As alleged, the defendants stole millions of dollars from investors by cynically leveraging King’s position as a sitting judge to lend false legitimacy to supposed investment opportunities,” Joseph Nocella, US Attorney for the Eastern District of New York, said in a statement.
“Today’s arrests demonstrate that this Office will hold accountable those who exploit victims for their own financial gain,” Nocella stated. “Holding corrupt individuals accountable for the abuse of public trust will always be a priority of our office.”
According to prosecutors, Sprei—also known as “Yechiel Sprei,” “Shimon Sprei,” and “Eli Shapiro” — allegedly put up the fraud in November 2024 by offering investors a chance at property in Freehold, New Jersey, which was in bankruptcy and up for auction.
However, Sprei allegedly stated that the two needed to pay $6.5 million to be considered for the deal, and that if they opted to withdraw, the money would be held in an escrow account in King’s name until then, according to the feds.
When investors demanded their money back last year, King and Sprei made up false justifications and only repaid approximately $1.5 million, pocketing the rest, according to a federal lawsuit.
King was already in deep water when he resigned from the bench in January amid various allegations that he assisted in defrauding investors out of more than $11 million, choosing to leave rather than participate with an investigation.
Former Brooklyn party head Frank Seddio was embroiled in the affair, and his political connections gave him sway over judicial nominations.
According to a federal lawsuit filed against the former party boss in October, Seddio was accused of being a “con artist” who used his influence to defraud investors of $2 million.
Meanwhile, state legal claims related to the New Jersey property case remain unresolved.
“We are going to monitor the criminal case and continue to pursue our clients’ civil remedies,” attorney Tab Keith Rosenfeld, who represents the deceived investors, told The Post on Wednesday.
King and Sprei were both arraigned in Brooklyn federal court on Wednesday on wire fraud allegations and told to return on Monday for a bond hearing.
Assistant US Attorney Andrew Wang told the court that the alleged fraud case against Sprei was “one of multiple schemes the government is investigating.”
US Magistrate Judge Clay Kaminsky set King’s bond at $250,000 and Sprei’s bond at $500,000. Both bonds were posted.
Neither guy spoke with reporters as they exited the courthouse.
The FBI and IRS conducted the joint investigation that resulted in the criminal indictment.
“Fraud that hides behind a veneer of legitimacy — especially a judge’s authority — strikes at the heart of public trust,” IRS New York Special Agent in Charge Harry Chavis said in a statement.
“IRS‑[Criminal Investigations] will relentlessly follow the money, expose deception, and ensure that those who manipulate and mislead investors are brought to justice,” he stated. “Today’s arrests send a clear message: schemes dressed up as opportunity will not shield wrongdoers from accountability.”
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