New Jersey Real Estate Development Firm and Four Executives Charged With $600 Million Ponzi-like Fraud
SEC Investment Advisor

New Jersey Real Estate Development Firm and Four Executives Charged With $600 Million Ponzi-like Fraud

Oct. 13, 2022 — The Securities and Exchange Commission today charged New Jersey-based National Realty Investment Advisors LLC (NRIA) and four of its former executives with running a Ponzi-like scheme that raised approximately $600 million from about 2,000 investors. 

The Complaint’s Allegations

The SEC’s complaint alleges that beginning in 2018, NRIA and its executives raised funds by promising investors their money would be used to buy and develop real estate properties, which would generate profits through a fund that NRIA set up to invest in the projects. The four executives, Rey E. Grabato II, of Hoboken, New Jersey, Daniel Coley O’Brien, of Southampton, New York, Thomas Nicholas Salzano, of Secaucus, New Jersey, and Arthur S. Scutaro, of Bloomfield, New Jersey solicited investors in a nationwide campaign promising returns of up to 20 percent.

In reality, the complaint alleges, investor money was used to pay distributions to other investors, to fund an executive’s family’s personal and luxury purchases, and to pay reputation management firms to thwart investors’ due diligence of the executives.

Classic Ponzi Scheme

“In classic Ponzi fashion, these defendants allegedly told investors that they would be paid distributions from profits of their fund when, in reality, payments were being made from the investors’ own funds,” said Thomas P. Smith, Jr., Associate Regional Director of Enforcement in the SEC’s New York Regional Office. “What makes this behavior even more callous is that they allegedly took advantage of 382 retirees who had contributed more than $94 million in savings.”

The complaint further alleges that NRIA manipulated the real estate fund’s financial statements and the financial information in marketing material distributed to investors, intentionally disguising the misuse of investor funds and creating the false appearance that NRIA and the fund were generating more revenue than they actually were and that operations were successful. However, NRIA had little to no revenue, and it and the fund filed for Chapter 11 bankruptcy protection on June 7, 2022.

The SEC’s complaint, filed in federal court for the District of New Jersey, charges NRIA and the four former executives with violating the antifraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. The complaint seeks injunctions against future violations of the antifraud provisions, disgorgement of ill-gotten gains plus prejudgment interest, penalties, and officer and director bars against the four executives, and names Olena Budinska and Jamie Samul, a/k/a Jamie Samul Salzano as relief defendants.

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Mark J. Astarita is a veteran securities attorney representing investors and financial professionals nationwide in securities investigations and arbitrations. Have a question? Email him at, call his office at 212-509-6544, or visit The Securities Lawyer

Securities Attorney at Sallah Astarita & Cox | 212-509-6544 | | Website | + posts

Mark Astarita is a nationally recognized securities attorney, who represents investors, financial professionals and firms in securities litigation, arbitration and regulatory matters, including SEC and FINRA investigations and enforcement proceedings.

He is a partner in the national securities law firm Sallah Astarita & Cox, LLC, and the founder of The Securities Law Home Page -, which was one of the first legal topic sites on the Internet. It went online in 1995 and is updated daily with news, commentary and securities law related links.

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