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Three New Yorkers charged for $184 Million fraud scheme

Federal action in fraud scheme

Three New Yorkers have become the center of a $184 million pre-IPO Fraud Scheme case.

The Securities and Exchange Commission (SEC) has taken a firm stand, charging individuals who were peddling unregistered membership interests in LLCs that “purported to invest in shares of pre-IPO companies.”

Two prominent entities, StraightPath Venture Partners LLC and Legend Venture Partners LLC, are now the subject of an SEC investigation for their alleged involvement in fraudulent activities and the partners who facilitated this illegal practice.

SEC targets fraud $184 million pre-IPO Fraud Scheme

StraightPath Venture Partners LLC and Legend Venture Partners LLC are now under court-ordered receiverships. This is for emergency action undertaken by the SEC in May 2022 and June 2023, respectively.

Mario Gogliormella, Steven Lacaj, and Karim Ibrahim, all New York residents, allegedly have operated and directed a fifty-strong salesforce call center.

In this call center, commonly known as a “Boiler Room,” these contact center agents fraudulently pressured investors via phone calls to say that certain shares had been substantially marked up.

Furthermore, the fraudulent phone conversations had these operators say, according to the SEC, that they were “between approximately 19 and 105 percent on average above the prices that StraightPath or Legend had paid for the underlying shares. As a result of these tactics, the defendants and their sales force allegedly pocketed more than $45 million in fees from unsuspecting investors from 2019 to 2022.”

Indictment action unsealed by New York District

The U.S. Attorney’s Office for the Southern District of New York unsealed an indictment for the three men accused of continuing this million-dollar fraud.

These charges include the three individuals breaching federal securities laws, a litany of civil penalties, and an attempt to recoup the funds this illegal business practice gained.

“We allege that the fraud in this case is like a Hollywood movie where the defendants ran boiler rooms using scripts they referred to as the ‘Bible,’ engaged in high-pressure sales tactics, and employed outright falsehoods to defraud investors,” said Sheldon L. Pollock, Associate Director of the New York Regional Office.

“After the SEC shut them down the first time, they simply rebranded their outfit, and today through our action we are seeking to ensure that they are held accountable for enticing and lying to investors.”

Image: Ideogram.

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