Two New York City men were involved in a Broadway musical scam that earned them an approximately total of $81 million. Last week, the Securities and Exchange Commission (SEC) made public the fraud charges brought tothe two men. Allegedly, they successfully ran a Ponzi scheme where the investor funds were raised while popular shows had high resell tickets.
Based on the SEC statement, Joseph Meli, 42, and Steven Simmons, 48, illegally enticed wealthy investors to spend millions of dollars on resell tickets for famous shows and concerts. The events that fell victims to this Ponzi scheme were Adele concert and Hamilton Broadway musical at Richard Rodgers Theatre. As for the investors, they were contacted throughout 13 different American states to invest a total of $81 million. Authorities declared that one of the suspicious deals comprised the purchasing of massive blocks of tickets for these shows.
The suspects have already reportedly spent $51 million out of the sum of $81 million. These funds were used to respect the earnings of several investors and cover personal expenses of their team members. Besides the civil complaint, the two New York City men were brought to justice for wire fraud, conspiracy, and securities fraud. They are currently not detained as they have already paid their $1 million bail. The U.S. Magistrate Judge James C. Francis IV refused the request of a prosecutor to hold them without the possibility of acquiting bail.
The head of the New York Office of the FBI, William F. Sweeney Jr. stated that the two defendants pledged as not guilty. They have also reportedly made a mock of the charges, and they named the scam a shell game. The official declared that it is common for the members of a Ponzi scheme not to think the whole operation through. At some point in the scam, those that are involved are bound to run out of money to pay off investors.
While Simmons’s attorney didn’t delay to inform the press that his client has no previous criminal record, Meli’s attorneys openly declared that the charges are false. Joon H. Kim, the Deputy U.S. Attorney, said that Meli pitched investors for Broadway musical tickets after which he sold them at greater profit. According to the criminal charge, the whole operations started back in November 2015.
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