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Man charged with theft of $1 million from relative January 5, 2010

Posted by jefhenninger in News.
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Samuel Franco of Brooklyn has been indicted for failure to make required disposition of property received, misconduct by a corporate official and misapplication of entrusted property in Monmouth County.  The indictment also charged his company, Signature Investment Holdings LLC of Ocean Township, with failure to make required disposition of property received.

He is alleged to have made an agreement with  a relative of his in August 2005 to invest $1 million in the purchase and sale of European bank instruments, such as bonds, certificates of deposit and notes. The agreement guaranteed the client would earn a 20 percent profit by December 2005.

By the end of 2005, the client did not receive his initial investment or the interest and in 2006, Franco made many claims that he would return the initial investment and the profits.  An audit of a bank account associated with the firm showed none of the money went to any of the investment accounts and that Franco used the firm’s account to pay personal expenses such as the remodeling a Florida condominium and monthly payments to Mercedes Benz and American Express.

This is what gets everyone.  Using personal expenses from the company account is generally a bad idea.  Assuming this is all true, what account signed off on all this?  As always, I wonder why this guy got indicted.  Half the time, there is no reason for it. 

Story is here.

Sisters indicted for alleged title agency scam December 30, 2009

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This is an interesting case. A Monmouth County grand jury returned a seven-count indictment on Monday against Rebecca Marchese-DePeri-Grande of Jackson, and her sister, Meredith Miller of Brick Township.  They were co-owners of Spectrum Title Agency in Freehold and Marchese-DePeri-Grande owned R.M.J title Agency in Freehold where Miller was an employee.   

It is alleged that between 2002 and 2005 the sisters stole $786,153 and spent the money on things such as luxury vehicles and vacations.  Law enforcement became aware of the situation when clients complained their creditors were demanding payments that should have been made by the title agencies. 

The sisters were charged with conspiracy, misapplication of entrusted property, theft by failure to make required disposition of property received and misconduct by a corporate official. Miller is also charged with two counts of bad checks and one count of theft by deception.

The state Department of Banking and Insurance is pursuing a separate investigation so you have to wonder if they had some advance notice that they were being investigated.  My guess is that they did.  Hopefully they had good attorneys that prepared them for all of this.

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Indictment for $1.7 million in securities fraud illustrates an important first step for attorneys July 22, 2009

Posted by tsclaw2209 in News.
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I often say that, in the context of white collar crime, the difference between a criminal case and a civil case is thin, usually blurry line.  One of the key factors that pushes a case over to the criminal side of the line is personal use of money.  In other words, if the money at issue was used solely for business purposes, it will likely be a civil case.  Likewise, as soon as you use the same money to enrich yourself, you will be looking at criminal charges.

Thus, the first thing I do in any case that could turn into a white collar crime case is to get my client’s financial records to assess their criminal exposure.  The attorney’s actions at the first sign of trouble could impact the entire case.  If this is a civil case but the State thinks otherwise, you may have to play this card now.  If there is some serious criminal exposure, trying to get a favorable resolution early on may we worth considering.

A good example of a white collar crime case where the defendant’s personal expenses will be at the heart of the State’s case is found in the press release below:

TRENTON – Attorney General Anne Milgram announced that a Bergen County man was charged today with defrauding hundreds of investors of more than $1.7 million by selling unregistered shares of stock in his startup horseshoe manufacturing company, which he claimed already had a prince from Dubai as a client.

The man allegedly stole more than $350,000 in investor funds to pay for personal expenses. Although he also spent funds in an effort to launch the company, the venture failed.

According to Director Deborah L. Gramiccioni, the Division of Criminal Justice filed a criminal complaint today in Superior Court in Bergen County charging Samuel M. Serritella, 64, of Garfield, with the crimes of securities fraud, theft by deception, misapplication of entrusted property, money laundering and misconduct by a corporate official, all in the second degree.

The charges resulted from an investigation by the New Jersey Bureau of Securities. Also today, Bureau of Securities Chief Marc B. Minor issued an order assessing a penalty of $20,000 against Serritella for violation of the New Jersey Uniform Securities Law. The Bureau Chief found that Serritella committed securities fraud and sold unregistered securities as an unregistered agent.

“This defendant sold $1.7 million in fraudulent and unregistered securities to trusting investors,” said Attorney General Milgram. “He repaid their trust by stealing hundreds of thousands of dollars of their money and leaving them with worthless shares in a failed company.”

Serritella was president, chief financial officer and chairman of International Surfacing Inc., which was based at 5 Erie Street in Garfield. It is charged that between February 2004 and May 2006, Serritella fraudulently obtained in excess of $1.7 million from more than 300 investors, most of whom were New Jersey residents, by selling them shares of International Surfacing. The shares were not registered with the Bureau of Securities as required by law, and Serritella was not registered as an agent authorized to sell securities in New Jersey.

Serritella held investment conferences where he told investors they could get in on the ground floor by purchasing shares in a company he planned to take public. He allegedly told at least one group of investors during a hotel meeting that the venture’s clients included a prince in Dubai.

Serritella allegedly deposited the investors’ funds into several bank accounts that he controlled. He allegedly misappropriated funds totaling approximately $354,720 for personal expenses. Seritella allegedly wrote checks to himself, made cash withdrawals at ATMs, paid credit card bills, and made debit card purchases using investor funds in the accounts. He used the funds to pay for such personal expenses as airline and hotel bills, tavern bills, and medical costs. He also allegedly used investor funds to make personal loans to three friends totaling $84,000.

Serittella used some funds for startup costs for the company, such as rent for a building, salaries, and payments to a company contracted to assist in manufacturing horseshoes.

“The Division of Criminal Justice is focusing on more complex white collar crime cases, including securities fraud cases such as this one,” said Director Gramiccioni. “In prosecuting this case, we are working closely with the Bureau of Securities, which thoroughly investigated the alleged fraud and thefts committed by Serritella.”

“Investors need to protect themselves by remembering that an offer which seems too good to be true is often precisely that – untrue. Investment fraud is on the rise in these difficult economic times and investments that promise ‘guaranteed results’ or offer unusually high profits should be carefully scrutinized before any investment is made,” Bureau Chief Minor said.

The Bureau of Securities investigation was conducted by Acting Chief of Investigations Rudolph Bassman. Deputy Attorney General Victoria Manning represented the Bureau in its investigation.

Serritella has been ordered to appear before Superior Court Judge Harry G. Carroll in Bergen County on Wednesday, July 29 at 10 a.m.