The Securities and Exchange Commission brought additional charges against a Long Island, New York-based boiler room previously sued for defrauding elderly and unsophisticated investors.
The latest charges allege that First Choice Healthcare Solutions Inc. CEO Christian Romandetti, the boiler room, and four others, manipulated the company’s shares generating more than $3.3 million of illegal profits and more than $560,000 in kickbacks for Romandetti.
The SEC’s complaint alleges that Romandetti and the other defendants duped more than 100 victims in a scheme that inflated First Choice’s stock price from less than $1 per share to $3.40 per share.
According to the complaint, from at least September 2013 until about June 2016, the defendants used multiple accounts in an attempt to disguise their trading, engaged in manipulative trading practices, and hired Elite Stock Research, a boiler room run by defendant Anthony Vassallo, to promote First Choice to vulnerable investors, some of who invested retirement savings.
“Microcap fraud continues to be a pervasive source of harm to retail investors,” Carolyn Welshhans, associate director of the division of enforcement, said in a statement. “Investors should be on the lookout for individuals employing methods like the ones we allege in our complaint—such as using unsolicited calls and high-pressure sales tactics.”
In a related action in July 2017, the SEC originally charged boiler room Elite Stock Research, as well as another Long Island boiler room and 13 individuals, with bilking victims out of more than $10 million through high-pressure sales tactics and lies about penny stocks. Seven of those individuals have pleaded guilty to parallel criminal charges brought by the U.S. Attorney’s Office for the Eastern District of New York. The SEC’s litigation against the 13 individuals is continuing.
This recent SEC action charges Romandetti, Vassallo, Mark Burnett, Jeffrey Miller, Frank Sarro and Elite Stock Research with fraud and Burnett, Miller, Sarro, and Vassallo with market manipulation. The SEC is seeking permanent injunctions, return of allegedly ill-gotten gains with interest, civil penalties, penny stock bars, and officer-and-director bars against Romandetti and Burnett.
Wife of ‘Hamilton’ Ticket Ponzi Schemer Ordered to Pay Up
A federal court ordered the wife of an accused Ponzi schemer to disgorge more than $4 million in investor funds.
The SEC charged Joseph Meli in January 2017 with fraud for running a Ponzi scheme. The SEC alleged that Joseph Meli raised money from investors to fund businesses purportedly created to purchase and resell tickets to such high-demand shows as Adele concerts and the Broadway musical “Hamilton”. Joseph Meli was criminally charged in a parallel case in which he pled guilty and was sentenced to a 78-month prison sentence. He also was ordered in the parallel criminal case to forfeit more than $104 million, including a house in East Hampton, New York, and to pay more than $56 million in restitution.
The SEC named Jessica Ingber Meli, the wife of Joseph Meli, as a relief defendant for the purpose of recovering investor funds allegedly in her possession, including $3 million which was used to purchase the house in East Hampton in her name. She agreed to settle with the SEC, consenting to disgorgement and prejudgment interest of approximately $4 million.