Defendants Ordered to Pay $7.95 Million
In Investor Restitution and Civil Penalties in Securities Fraud Case
NEWARK – Attorney General Anne Milgram announced today that the New Jersey Bureau of Securities in the Division of Consumer Affairs has obtained a judgment ordering Fred J. Miller of Fort Lee, Eric Riedman of New York, and their related Bergen County-based companies to pay $3.6 million in restitution to investors and $4.35 million in civil penalties to the Bureau of Securities.
New Jersey Superior Court Robert P. Contillo also permanently enjoined and restrained the defendants from selling, distributing or engaging in any securities-related activity.
Following a multi-day hearing last year, Judge Contillo found that “the Attorney General clearly and convincingly established a plethora of securities laws violations” by the defendants. From 1996 to 2003, defendants Miller and Riedman created, operated, and sold unregistered securities including promissory notes offering a 12% return and equity interests issued by their related entities from an office in Englewood Cliffs, New Jersey.
Miller and Riedman raised over $3.3 million from approximately 160 investors through fraudulent misrepresentations and omissions regarding, among other things, the investments’ risks, poor operating history of the entities, and the intended use of the investors’ funds. In addition, Judge Contillo found that defendants Miller and Riedman misappropriated and diverted investor funds for their own use and to their personal entities that served no legitimate investor or business purpose.
“The exemplary efforts by the Bureau investigators, and the Deputy Attorneys General who tried this case, confirms our ongoing commitment to protect the investing public from investment scams, as well as our fortitude to see cases to final judgment in the courts to ensure that justice is served,” said Bureau of Securities Chief Vincent J. Oliva.
“Investors should check with the Bureau of Securities before investing their hard-earned dollars, since both the securities being offered for sale and the persons offering it must be registered with the Bureau,” Oliva added.
The Bureau can be contacted toll-free within New Jersey at 1-877-I-INVEST (1-877-446-8378) or from outside New Jersey at 973-504-3600. The Bureau’s web site is located at http://www.njsecurities.gov.
Deputy Attorneys General Samuel Scott Cornish and Christopher W. Gerold represented the state in this matter, assisted by Supervising Investigator Rudolph Bassman.