A former Brooklyn jurist allegedly weaponized his judicial title to deceive real estate investors — a case with direct lessons for mortgage professionals nationwide.
Federal prosecutors in Brooklyn have charged a former New York City judge and a politically connected real estate developer with wire fraud conspiracy, alleging they exploited the authority of the bench to swindle investors out of at least $5 million through a fabricated escrow arrangement.
Edward Harold King, 72, a former Kings County Supreme Court Justice who resigned from the bench on Dec. 31, 2025, and Yechiel "Sam" Sprei, 37, a developer known under several aliases including Eli Shapiro and Shimon Sprei, were arrested by IRS Criminal Investigation agents on May 14, 2026.
The two men appeared before US Magistrate Judge Clay H. Kaminsky in Brooklyn federal court, where King was released on a $250,000 bond and Sprei on $500,000.
"As alleged, the defendants stole millions of dollars from investors by cynically leveraging King's position as a sitting judge to lend false legitimacy to supposed investment opportunities," said US Attorney Joseph Nocella Jr. for the Eastern District of New York.
"Holding corrupt individuals accountable for the abuse of public trust will always be a priority of our office."
If convicted, both men face up to 20 years in federal prison.
How the alleged scheme unfolded
According to federal prosecutors, the operation took shape in November 2024, when Sprei presented two investors with an opportunity to acquire commercial real estate in Freehold, New Jersey, through a bankruptcy court auction.
To participate in the bidding, Sprei told them, each prospective buyer first had to demonstrate "proof of liquidity" by depositing funds into escrow — an account held in King's name.
Sprei represented King as both an independent escrow agent and an active sitting judge, and the investors were told their money would remain untouched and could be withdrawn within two business days on request.
Based on those assurances, the investors wired $6.5 million to King's account, backed by written escrow agreements bearing King's signature.
Within days, federal prosecutors say, millions of dollars were quietly transferred from King's account into one held in Sprei's name, without the investors' knowledge or consent.
When the investors sought the return of their deposited funds in April 2025, King began offering false explanations and stalling tactics, at one point proposing that his attorney deposit the funds with an unspecified court, according to the complaint.
In May 2025, King and Sprei returned $1.5 million — roughly a quarter of the total — via two wire transfers. The remainder has not been returned.
Assistant US Attorney Andrew Wang told the court at the initial appearance that the New Jersey transaction was "one of several schemes that the government has been investigating," and described "many, many millions of dollars" flowing through Sprei's accounts in recent years.
Separate civil lawsuits allege that Sprei ran near-identical escrow schemes against other investors, with at least one involving a Staten Island property also routed through King's escrow account.
A judge who kept practicing law
King ascended to the New York City Civil Court in Brooklyn in 2023 and was appointed to the state's main trial court the following June, a position he held for less than 18 months before stepping down.
State judicial conduct rules bar full-time judges from practicing law, acting as fiduciaries, or engaging in outside business activities.
According to the New York State Commission on Judicial Conduct, complaints against King included allegations that he continued accepting funds into personal attorney escrow accounts while on the bench, a direct violation of those prohibitions.
King denied the allegations at the time of his resignation.
Commission administrator Robert Tembeckjian said the allegations were "so egregious as to warrant his permanent departure from the bench."
The criminal case is being prosecuted by the Office's Public Integrity Section, with Assistant US Attorneys Rebecca Schuman and Andrew Wang handling the matter alongside IRS-CI Special Agent Anthony J. Cunder.
What the case signals for mortgage professionals
New York ranked as the highest-risk state for mortgage fraud in Q4 2025, according to Cotality's National Mortgage Application Fraud Risk Index, with a score of 260 — nearly double the national average of 133.
The King-Sprei case is notable not for the technical complexity of the alleged scheme, but for its social engineering dimension: the use of judicial credentialing to manufacture trust.
Investors were not deceived through forged documents or technical manipulation alone. They were shown a sitting judge and told their money was safe.
For mortgage brokers advising clients on real estate investments, the case reinforces the limits of credential-based due diligence.
Mortgage Professional America has reported extensively on the rise of escrow fraud, including guidance for brokers on how to protect investor clients during wire transfers — the most vulnerable stage of any transaction.
Experts recommend verbal verification via pre-confirmed phone numbers, encrypted communication portals, and the practice of treating any last-minute changes to wiring instructions as a red flag regardless of the source.
Stay updated with the freshest mortgage news. Get exclusive interviews, breaking news, and industry events in your inbox, and always be the first to know by subscribing to our FREE daily newsletter.
