Criminal Cases: Hedge Fund Manager is Sentenced for Bilking Veterans of $1.8M, Charges Brought Over $81M Ponzi Scam Involving Hamilton Tickets, and Indictment in $17M Ponzi Scam is Dropped

Chicago Hedge Fund Manager Gets Over Four Years in $1.8M Fraud
Clayton Cohn is sentenced to more than four years behind bars and he will pay $1.55M in restitution for targeting military veterans in a $1.8M hedge fund fraud. Cohn is an ex-US Marine. He pleaded guilty to the criminal charges against him.

Cohn is accused of pretending to be a successful hedge fund manager to persuade clients to invest with his Marketaction Capital Management. Of the over $1.8M that was invested,he lost more than $1.5M and spent at least $400K on his luxury lifestyle and business investments.

The US Securities and Exchange Commission had brought civil charges against him in 2013 when they accused Cohn of soliciting investors through his Veterans Financial Education Network. The non-profit was supposed to help veterans handle their money. Instead, he diverted some of their funds toward himself. The regulator stayed its case against him following the federal indictments. Now, the civil fraud charges will proceed.

Ponzi Scam Involving Hamilton Resale Tickets Lead to $81M Fraud Case
The SEC has filed civil charges against Matthew Harriton and Joseph Meli for allegedly running an $81M Ponzi scam. The alleged fraud purportedly involved using investor funds to pay for businesses that were supposed to buy and resell tickets for in-demand shows, including the hit Broadway musical Hamilton and singer Adele’s concerts. According to the regulator, the New York men misrepresented that all of investors’ funds would be used to purchase large ticket blocks. These tickets were to be resold at a profit so that there would be high returns.

Harriton and Meli allegedly raised over $81M from at least 125 investors. Most of the money was used for Ponzi-like payments that involved using new investors’ money to pay earlier investors. $2M was purportedly used for the two men’s own expenses, including casino payments and jewelry purchases. The SEC wants disgorgement, interest, and penalties.

Meantime, prosecutors in New York have brought criminal charges against Meli.

Judge Tosses Securities Fraud Case in Alleged $17M Securities Fraud
Not all criminal securities fraud cases end in a way that investors who may have been bilked would like. A federal judge has dismissed the indictment against Guy Gentile, a man accused of running a $17M pump-and-dump scam. According to U.S. District Judge Jose Linares in New Jersey, the statute of limitations had expired.

Gentile, formerly the owner of StockUSA, was indicted by a grand jury last year for conspiracy to commit securities fraud and securities fraud involving the alleged inflation of stock prices of two publicly traded companies. Gentile and his partners purportedly made approximately $17.2M.

Judge Linares, however, said that the statute of limitations expired in 2013. This would be five years after the alleged securities fraud would have occurred. A civil case against Gentile, brought by the SEC, is still pending.

At Shepherd Smith Edward and Kantas, LTD LLP, our securities fraud law firm works with investors in trying to recoup their investment losses. Regardless of whether a criminal case or civil charges have been brought against the financial representative or firm that you believe is responsible, or whatever the outcome of either case, it is important that you bring your own securities fraud claim and you are represented by an experienced broker fraud attorney. Contact us today.

Read the SEC Complaint Against Cohn (PDF)

The SEC Complaint in the Hamilton Ticket Ponzi Scam (PDF)

Adele, ‘Hamilton’ ticket reselling fraud: Feds file Ponzi scheme criminal charge, MyNewsLA, January 27, 2017

Man accused of $17M ‘pump-and-dump’ scheme walks free, InvestmentNews, January 31, 2017