Prosecutors say the scheme involved convincing two investors to place about $6.5 million into an attorney escrow account tied to a bogus bankruptcy-auction opportunity in Freehold, New Jersey, with most of the funds later transferred to Sprei’s account and not returned.

The charges carry a potential sentence of up to 20 years in prison, and the case references prior civil complaints and a state judicial-conduct investigation into King.

King resigned from the bench at the end of 2025 amid an ongoing investigation by the New York Commission on Judicial Conduct into allegations including defrauding investors and continuing to practice law while serving as a judge.

This is described as a developing story and may be updated.

The U.S. Attorney’s Office announced the charges, but the complaint did not disclose the exact location or use of the Freehold property.

The defendants face ongoing federal proceedings, with the initial court appearance underscoring the breadth of the government’s investigations into similar schemes.

There is no evidence in the complaint that a property was actually bid on, and a January 2025 notice did not identify King as escrow agent or set the $6.5 million escrow deposit.

King and Sprei were set for further federal court appearances to finalize bond arrangements, and both declined to comment.

Prosecutors described Sprei as financially prominent with substantial recent money movements, suggesting a broader pattern under investigation.

The U.S. Attorney stressed that this transaction is one of several schemes under scrutiny, with extensive fund movements traced through Sprei’s accounts.

During arrest, investigators noted inconsistencies, including claims of extra electronic devices; a second phone was recovered during a search.

Investigators say Sprei misrepresented finances to FBI agents, including claims about possession of devices beyond a cellphone.