SEC Uncovers Concert Ticket Investment Scam
On September 6th, 2017, the Securities and Exchange Commission (SEC) charged Craig Carton, a prominent sports radio host from New York City, with investment fraud. According to the agency, Mr. Carton, along with his co-conspirator, Joseph Meli, stole millions of dollars from innocent investors.
The SEC alleges that this the duo used a complex concert ticket resale scheme to lure in unsuspecting investors. Notably, Mr. Meli was previously implicated in another similar fraud scheme last year. In this post, our experienced Miami investment fraud attorneys explain the charges against Craig Carton and Joseph Meli.
Material Misrepresentations and the Misappropriation of Investor Funds
Understanding the Basics of the Plan
According to the complaint, which was filed by the SEC in the federal court in the Southern District of New York, Craig Carton and Joseph Meli came to an arrangement with high-net worth investors in the late summer of 2016. The plan required investors to wire cash to a holding company held by Mr. Carton. Upon receiving the cash, Mr. Carton would then pool all of the investor money into a giant fund, and use that to purchase concert tickets. Specifically, the plan was to buy tickets for concerts put on by the superstar singer Adele, who was set to go on a tour all around the United States.
The Promises That Were Made to Investors
The SEC contends that Mr. Carton and Mr. Meli induced this investment by convincing the investors that they would be able to obtain a large block of tickets for well below face value. To be more specific, representations were made to investors that Mr. Carton and Mr. Meli were able to purchase a large block of tickets directly from Adele’s management company, before those tickets were to hit the open market. By quickly flipping the tickets, investors would be able to bring in a large profit. In fact, the investors were promised a return of 30 to 50 percent, within a period of a few months.
The Reality: A Ponzi Scheme
Unfortunately for the investors, Mr. Carton and Mr. Meli neither had the means nor the intention to carry out this plan. Instead, the money from the investors was being diverted. No tickets were ever being purchased. SEC investigators contend that the money went to repay investors who the men bilked in early failed schemes and to repay the gambling debts of Mr. Carton. In other words, the two men were running a Ponzi scheme. In all, as much as $3.6 million of investor money was misappropriated, and other $2 million was stolen directly from concert venues.
Were You a Victim of Investment Fraud in South Florida?
We can help. At Carlson & Associates, P.A., our investment fraud lawyers have helped many victims recover the monetary compensation they deserve. We handle a wide array of investment fraud cases, including Ponzi scheme claims. Call us now at 1-(305)-372-9700 to schedule your confidential initial consultation. Our firm is located in the heart of Miami, and we represent fraud victims throughout southeastern Florida.