New Jersey issues “cease and desist” order against NRIA for alleged fraud of $630 million


The Green Roof Condominiums in Guttenberg, developed by the NRIA. Image via

Bureau of Securities found that rather than relying on cash-flow proceeds, company officers used investors’ money to pay off other investors and diverted “millions of investor dollars to make lavish payments to family members”

On Tuesday, New Jersey issued a “cease and desist” order against the Secaucus-based National Realty Investment Advisors (NRIA) alleging they “fraudulently” sold $630 million worth of securities in the last four years to “at least” 1,800 investors nationwide, according to The Philadelphia Inquirer.   

The state Bureau of Securities found that rather than relying on cash-flow proceeds, company officers used investors’ money to pay off other investors and diverted “millions of investor dollars to make lavish payments to family members,” the state Attorney General’s Office said.

That included pay for a no-work job for the wife of portfolio manager Thomas N. Salzano, who last year was criminally charged with fraud by federal authorities. Officers hired “family-owned or controlled companies,” New Jersey officials said, among them a construction company in which Salzano’s son was chief financial officer.

“The fraudulent conduct identified by our Bureau of Securities in this case is striking,” said Acting Attorney General Platkin. “Today, we are taking action to stop their unlawful conduct and to put the public on notice. If an investment opportunity promising high guaranteed returns sounds too good to be true, it usually is.”

Their alleged fraud involved selling securities, in the form of membership units in a real estate investment fund known as the NRIA Fund, to at least 1,800 investors across the country, including 380 investors in New Jersey.

In addition to NRIA, the entities named in the Bureau’s order are: NRIA Partners Portfolio Fund I, LLC, also known as “the NRIA Fund”; NRIA Capital Partners, Inc.; and NRIA Structured Credit Strategies, LLC. The company principals named in the order include: Thomas Nicholas Salzano, of Secaucus, who was a senior independent executive advisor and portfolio manager of the NRIA Fund; Rey Grabato, of Hoboken, president of the NRIA Fund and 80 percent owner of NRIA; D. Coley O’Brien, of Southampton, NY, co-CIO of the NRIA Fund and 100 percent owner of NRIA Capital Partners; and Arthur Scutaro, of Bloomfield, executive vice-president of project management and advisor to the NRIA Fund.

According to the Bureau’s order, NRIA and its principals touted the NRIA Fund as a billion-dollar-plus real estate development enterprise focused on the “ground-up” development of townhomes, condominium complexes, luxury residences, and mixed-use rental developments. NRIA claimed the fund involved the opportunistic purchase of land or property at below-market value prices, which would then be developed for sale at a large profit.

While NRIA and its entities haven’t been charged criminally, they have been under investigation by federal agencies and officials in three states. The 63-page order itemized what the New Jersey Attorney General’s Office called “unlawful conduct,” mandating that the company “cease and desist” engaging in it. “The fraudulent conduct identified … is striking,” acting Attorney General Platkin said in a statement.

The order prohibits NRIA “from engaging in the conduct described in the order itself, or from further securities law violations,” and publicizes the alleged fraud, the state Attorney General’s Office said. It was unclear how the order would be enforced, according to the Philadelphia Inquirer report.  

In 2018, the company launched a heavily marketed offering called the NRIA Partners Portfolio Fund, trumpeting its largest developments — in Philly, where it owns a vast tract of waterfront property that remains unbuilt upon; Hudson and Bergen Counties, N.J.; Brooklyn; and Palm Beach.

The Inquirer had reported in September that the company had undertaken a major marketing campaign for the fund, spending an estimated $9 million on TV ads since the start of 2019. Nearly all of it went to Fox News for ads that mostly ran on the Tucker Carlson Tonight and Hannity shows. It plastered billboards at the entrances of the Lincoln and Holland Tunnels, the Attorney General’s Office said.

However, New Jersey officials said that rather than generating hefty profits with its initiatives, the company acted “to conceal the company’s poor performance,” which included using investors’ money for annual payouts. The company filed for bankruptcy on June 7. In response to The Inquirer’s questions, in September NRIA had said that was part of a special “‘buy, build, and sell’ strategy,” and that investors were told how the company planned to deploy their contributions.

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