A scene from "Hamilton" starring original cast members.

The SEC has expanded the scope of the Hamilton tickets Ponzi scheme case, which bilked at least 138 investors in 17 states out of $97 million.

The SEC’s complaint, filed Tuesday, demands a jury trial in the suit that alleges New York City businessmen Joseph Meli and Matthew Harriton defrauded sophisticated investors in a scheme to buy large blocks of tickets to additional popular concerts and shows — including the Desert Trip concert series featuring Bob Dylan, Paul McCartney and The Rolling Stones — and resell them at a profit.

The scheme includes advance sales for the upcoming Broadway play “Harry Potter and the Cursed Child,” currently playing in London.

“The case now includes five new parties, including Melli’s mother, that may have received investor funds,” Jay Lippman, managing director at Exiger and the former executive director, compliance at JPMorgan Chase, told ThinkAdvisor Thursday.

“Schemes like this work because the principals behind them appear to be bona fide investment professionals,” Lippman said. “Their LinkedIn profiles, combined with entertainment industry connections and falsified investment agreements made for a compelling-looking presentation. Investors in these types of alternative investments need to scratch beneath that shiny surface.”

As the SEC states, Meli, 42, and Harriton, 52, both live in New York City. They are the direct or indirect owners of Advance Entertainment II. Meli owns 100% of Advance Entertainment which, in turn, owns an 80% interest in Advance Entertainment II.

The SEC says the businessmen raised, and “are continuing to raise,” more than $97 million from 2015 to the present for purported investment in ticket reselling enterprises involving high-profile events including, among others: the Broadway musical Hamilton; Adele, Metallica, and Nine Inch Nails concerts; a concert festival known as Desert Trip, featuring artists including The Rolling Stones, Bob Dylan, Paul McCartney, and others; and advance sales for the upcoming Broadway play Harry Potter and the Cursed Child, currently playing in London.

Both Jessica Ingber Meli, Joseph Meli’s spouse, and his mother, Anna Meli, have been named as relief defendants.

From January 2015 to January 2017, Ingber Meli and personal credit card accounts in her name received more than $710,000 of investor funds from the ticket investment scheme through transfers and payments from 127 Holdings, according to the SEC compliant. Also, in or around October 2015, a property was purchased in East Hampton, New York, for approximately $3 million in cash in the name of Jessica Ingber Meli. The purchase of the property was funded by investor funds from the ticket investment scheme transferred from a bank account in the name of Advance Entertainment, according to the complaint.

Anna Meli is the mother of Joseph Meli and maintains an address in the same building as Joseph Meli in New York City. “From January 2015 to January 2017, she received at least $405,000 of investor funds from the ticket investment scheme through transfers and payments from Advance Entertainment and 127 Holdings,” the complaint states. 

— Check out What Investment Fraud Victims Have in Common on ThinkAdvisor.