Linus Unah – Fourth Estate Contributor
Washington, D.C., United States (4E) – The U.S. Securities and Exchange Commission (SEC) Friday announced fraud charges against two New York City men accused of running a Ponzi scheme that defrauded investors in ticket resale business for shows.
The SEC alleged that Joseph Meli and Matthew Harriton ran a Ponzi scheme with money raised from investors to fund businesses purportedly created to purchase and resell tickets to such high-demand shows as Adele concerts and the Broadway musical Hamilton.
According to the federal securities regulator, Meli and Harriton told investors that all of their money would be pooled to buy large blocks of tickets that would be resold at a profit to produce high returns for investors.
But they went ahead to use the bulk of investor funds for making Ponzi payments to prior investors using money from new investors, the SEC alleged.
The two men are accused of diverting almost $2 million for such personal expenses as jewelry purchases, private school and camp tuition, and casino payments.
According to the SEC’s complaint, the scheme also misrepresented that there was an agreement with the producer of Hamilton to purchase 35,000 tickets to the musical.
Investor money was supposedly paying part of that cost with the return on investment promised within eight months, the agency noted.
The SEC alleged that no such agreement or purchase ever happened.
Meli and Harriton allegedly raised more than $81 million from at least 125 investors in 13 states.
“As alleged in our complaint, Meli and Harriton raised millions from investors by promising big profits from reselling tickets to A-list events when in reality they were moving investor money in a circle and creating a mirage of profitability,” Paul G. Levenson , Director of the SEC’s Boston Regional Office, said in a statement.
The SEC’s complaint, filed in a New York federal court seeks disgorgement of ill-gotten monetary gains plus interest and penalties.
Article – All Rights Reserved.
Provided by FeedSyndicate