Two men, Joseph Meli from Manhattan and Steven Simmons from Connecticut were arrested on Friday for cheating wealthy investors through ticket Ponzi schemes. The accused men allegedly made the wealthy investors believe that they are investing in ticket businesses for several popular shows such as Adele concerts and Broadway fame Hamilton. Wealthy individuals from several states were encouraged to invest in the business so that they can make huge profits. The multi-million dollar investment Ponzi scheme came to an end when the perpetrators couldn’t manage the Ponzi business anymore.
According to the civil complaint launched by the Securities and Exchange Commission, the cheaters ran a Ponzi scheme where they generated $81 million dollar investment. Investors from 13 states are encouraged to enter into the ticket business. The investors were made to believe that the business involves buying huge blocks of tickets for important concerts and musicals. The individuals were promised huge money when the tickets were sold later at a higher price.
Out of the $81 million investment, about $1 million is used for personal expenses of the accused men and also to pay off the investors. Simmons and Meli were charged with criminal charges related to wire fraud, securities fraud and conspiracy. Meli was additionally included in the civil complaint. While the prosecutor requested that the accused must be held without any bail, the US Magistrate judge them to go free with a $1 million bail each.
Simmons didn’t provide any comment, but his attorneys said that their client doesn’t have a criminal record. The attorneys of Meli claimed that all the accusations are false. John H. Kim, deputy US Attorney said that Simmons and Meli ran an effective Ponzi scheme luring wealthy individuals claiming that their business is legitimate. Allegedly, Meli made some deals with the investors claiming that he can sell the Broadway tickets later for a good profit. However, Meli was stealing money from one investor to pay the others. The defendants called the entire scheme as a ‘Shell game’.
In the Ponzi schemes, the fraudsters hope to escape with the money from the investors, but they run out of money and get caught in the act. Both the men engaged in fraudulent activities starting from November 2015 and they were in a tight spot when the investors asked for their money. In the complaint, it was mentioned that Meli owns a luxury car dealership worth $200,000. Simmons allegedly told an FBI agent after the arrest that ‘Meli would hopefully put two slugs in the back of the cooperator’s head’.
Attorney representing Simmons said that Simmons made an ill-advised comment, but he has no criminal history. Meli also drained his bank account and got hold of his passport and valuables. His attorneys said that Meli used the money to pay for the law firm and his valuables are with the law firm. Michael Bowen, Meli’s attorney said that they will fight against the false criminal charges and complaints.