Thomas John Sfraga, 56, Sentenced to Nearly Four Years in Prison for Defrauding Investors Out of Over $2 Million in a Ponzi Scheme Involving Vandelay Contracting Corporation.

A Brooklyn-based influencer in the cryptocurrency realm, Thomas John Sfraga, has received a nearly four-year prison sentence for orchestrating a massive Ponzi scheme that defrauded investors out of more than $2 million. The U.S. Department of Justice disclosed this information on Friday, indicating the severity of Sfraga’s fraudulent activities.

Known for his podcasting days under the pseudonym “TJ Stone,” Sfraga misled at least 17 unsuspecting individuals, convincing them to invest in his fictitious business operations, including the so-called Vandelay Contracting Corporation—a name lifted from the popular sitcom Seinfeld. His operation proved as deceitful as the show’s fictional company, which was created by character George Costanza in a ploy to collect unemployment benefits.

However, Sfraga’s deception was far more damaging, targeting friends, neighbors, former classmates, and even the parents of his children’s teammates for his schemes. Federal documents illustrate the lengths to which he would go to exploit the trust of those closest to him, manipulating personal relationships for his gain.

“Sfraga callously stole from friends, next-door neighbors, and the parents of children who played on teams with his own children, as well as from individual cryptocurrency investors,” remarked John J. Durham, U.S. Attorney for the Eastern District of New York. “There was no humor or levity in his use of a Seinfeld-inspired company, Vandelay Industries, to execute this fraud, which brought significant financial and emotional distress to trustworthy hard-working individuals.”

Sfraga’s fraudulent activities spanned from 2016 to 2022, during which he deceived investors primarily in the Brooklyn, Long Island, and Staten Island areas. He lured them with the false promise of investing in lucrative real estate and cryptocurrency ventures. Instead, he misappropriated those funds for personal expenditures and to repay earlier investors, thus maintaining a facade of legitimacy.

Ultimately, Sfraga’s elaborate ruse crumbled more disgracefully than Costanza’s schemes. Investors eventually caught wind of the deception, prompting Sfraga to go on the run. He first fled to Arizona, adopting an alias to obscure his identity before relocating to Nevada, where he was arrested for failing to settle a casino bill. In total, the U.S. District Judge Frederic Block sentenced Sfraga to 45 months in prison after he pled guilty to wire fraud in May 2024. Besides the prison term, the court ordered Sfraga to forfeit $1.3 million, although the exact restitution amount owed to his victims will be decided later by federal authorities.

Despite Sfraga’s attorney not responding to numerous inquiries for comments, the case has sent shockwaves through the community, especially among those he deceived, leaving them grappling with their financial losses and emotional turmoil.

17 Victims of Sfraga’s ‘Seinfeldian’ Ponzi Scheme

Among the many victims were those whom Sfraga had known since childhood and parents whose children played on the same team as his. Some were drawn to him through cryptocurrency networking events, and others fell prey to his deceitful charm and fraudulent solicitations, even losing wedding gift money that had been gifted to a young couple.

Investors funneled their money into Sfraga’s unsubstantiated ventures, one of which included a company called Build Strong Homes and another described as a “virtual wallet” cryptocurrency venture. Prosecutors relayed a poignant statement from one victim: “During a challenging time in my life, as I faced a difficult and costly divorce, [Sfraga] and I met socially. He acknowledged my financial struggles and offered a way to help . . . He assured me, as a friend.”

Another investor from Brooklyn believed she was collaborating on a wise investment strategy with Sfraga, who made a few initial payments before vanishing, cutting off communications entirely. One victim, residing in Long Island, along with her father, invested hundreds of thousands into phony real estate projects, only to be further manipulated into handing over $50,000 of wedding gift money when Sfraga claimed his dad was critically ill and he needed to travel to Alaska.

The phony Vandelay Corporation was supposedly linked to a cryptocurrency enterprise with unnamed Manhattan offices. In one instance, Sfraga manipulated another victim—their meeting occurring at the fraudulent company’s headquarters—into providing him with $30,000 to establish Vandelay “e-wallets.” However, this individual never received the promised service, as Sfraga later claimed to have suffered a heart attack and ceased communication altogether.

At a guilty plea hearing, Sfraga openly admitted, “Instead of investing money, I used some of it to cover my own expenses and to pay back earlier investors and business associates. I knew that some of the assurances and guarantees I made to investors were false, and that this was wrong.”

Flight and Arrest at Las Vegas Casino

As the demand from investors escalated, many sought refunds, leading Sfraga to relocate to Arizona, where he had lived during his teenage years. He adopted a new identity, but investigators soon pieced together his actual name and linked him to several criminal activities, ultimately leading to his arrest for an unrelated property crime.

After briefly evading capture by posting a $3,600 cash bond, Sfraga fled again. His luck ran out when he was apprehended in Nevada for an unrelated incident involving unpaid bills at a Wynn Casino in Las Vegas. Following this arrest, Sfraga was handed over to federal authorities, leading to his court appearance in Brooklyn on January 22, 2024.

Exploring Sfraga’s Background and Opportunities

Adding a layer of complexity to Sfraga’s con is the fact that he had seemingly enjoyed a stable and fulfilling life prior to his fraudulent undertakings. Prosecutors painted a picture of a man who was married to a supportive spouse and had two healthy children involved in local sports. Some of his legitimate business ventures yielded impressive annual earnings, reportedly reaching up to $100,000. He even made a significant income through his podcast, which saw over a million listeners and provided sponsorship revenue between 2017 and 2018.

Having moved with his mother to Arizona post-divorce, Sfraga managed to stay largely out of trouble, aside from one unspecified incident in his youth. He even nearly pursued a college baseball career with Arizona State University, demonstrating that he had every opportunity for a productive and law-abiding existence. Instead, he chose deceit, betraying the trust of friends and neighbors to fund his lifestyle based on fraud.

As the legal complexities surrounding such fraud cases continue to unfold, AI legalese decoder can provide critical assistance. This innovative tool simplifies legal terminology, making it easier for victims and those impacted by scams like Sfraga’s to understand their rights and the nature of the charges against the perpetrators. By translating dense legal jargon into clear language, AI legalese decoder empowers individuals to navigate the legal system more effectively, ensuring they can advocate for themselves and pursue justice in cases of financial fraud.

Michael Loria is a national reporter on the USA TODAY breaking news desk. Contact him at mloria@usatoday.com, @mchael_mchael or on Signal at (202) 290-4585.