What You Need to Know
- The defendants each face up to 15 years in prison, according to the Nassau County District Attorney in New York.
- FINRA barred one of the defendants in 2012 after he did not cooperate with its investigation.
- The SEC filed a complaint against the defendants for their alleged fraud scheme also.
A Long Island broker who was barred by the Financial Industry Regulatory Authority and his business partner were arraigned Wednesday on charges they stole $436,000 from four investors who believed they were investing in pre-initial public offering stock for several high-profile companies, according to Nassau County District Attorney Madeline Singas.
The defendants instead allegedly spent the investors’ funds on personal luxury items and travel, Singas alleged. “These defendants allegedly conned investors to give them hundreds of thousands of dollars promising high returns from prominent companies, but instead they pocketed the funds to support their lavish lifestyles,” she said in a statement.
The case was referred to the NCDA earlier this year by the Securities and Exchange Commission, which filed a complaint against the defendants in U.S. District Court for the Eastern District of New York on Tuesday.
Peter Quartararo, 56, of Glen Cove, was charged with five counts of grand larceny in the second degree, one count of grand larceny in the third degree, one count of conspiracy in the fourth degree, and one count of scheme to defraud in the first degree — all felony charges — according to Singas.
Paul Casella, 54, of East Meadow, was charged with two counts of grand larceny in the second degree, and one count of conspiracy in the fourth degree, she said.
If convicted on the top count, the maximum sentence for each defendant is five to 15 years in prison, according to Singas, who said the defendants were arraigned before Judge Karen Moroney.
Quartararo and Casella each worked at Milestone Group Management — Quartararo from 2004-2005 and Casella from 1999-2005, according to their reports on FINRA’s BrokerCheck website. During his nine years in the industry, Quartararo was registered as a rep with 14 firms, while Casella was registered with six firms from 1994-2005, according to BrokerCheck. Neither of them is registered anymore.
Black Book Capital discharged Quartararo Dec. 7, 2010, alleging he “illegally changed his address to online to conceal an unauthorized trade,” an allegation that he denied.