Erez Baver, a bookkeeper at a healthcare firm based in Skokie, confessed to participating in a Ponzi scheme, which involved misappropriating investor funds and fraudulently diverting investment proceeds. Baver pled guilty to one count of wire fraud last month in a federal court in Chicago and agreed to cooperate with prosecutors. His former boss, Zvi Feiner, faces 10 counts of wire fraud.
Fraudulent Scheme Orchestrated by Feiner and Baver
Feiner, 51, and Baver, 42, orchestrated a scheme to defraud investors through a series of limited liability companies (LLCs) under the FNR Healthcare LLC umbrella, as detailed in Baver’s plea agreement. The now-dissolved firm, located at 8170 McCormick Blvd., was established in 2007.
According to the plea agreement, Baver and Feiner misrepresented the cost of properties they were purchasing—typically nursing homes or assisted living facilities—using excess funds to make Ponzi-style payments to investors in their other LLCs. Feiner exploited his position as an Orthodox Jewish rabbi to solicit investments in the LLCs, targeting the Orthodox community for their fraudulent scheme.
Covering Up the Fraudulent Activities
Feiner would also secretly sell investment properties and misappropriate the proceeds meant for investors, while Baver received “commissions” from the sales. To cover up these sales and misappropriation of funds, they continued making distribution payments to investors and provided fraudulent tax documents.
Potential Sentencing and Restitution
A federal wire fraud conviction can result in a maximum sentence of 20 years in prison. Baver’s plea agreement suggests a sentencing guideline of approximately eight to 10 years. If he fully cooperates with federal prosecutors, including potentially testifying in other cases, they may recommend a sentence of under five and a half years. A sentencing date is yet to be determined.
Baver agreed to full restitution, along with any jointly liable co-defendants, estimated at over $14.5 million. He also consented to forfeit $3.76 million in proceeds traceable to the admitted wire fraud.
Feiner’s Case Still Pending
In Feiner’s case, prosecutors and his attorney, Harold Garfinkel, had hoped to schedule a guilty plea hearing but required additional time to calculate the applicable losses. Garfinkel recently requested another 60 days to resolve pending questions about the loss amount.