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Two charged in Hamilton ticket resale Ponzi scheme

PostMessage posted...: Sun Jan 29, 2017 2:16 am
by smix
Two charged in Hamilton ticket resale Ponzi scheme
USA Today

URL; http://www.usatoday.com/story/money/201 ... /97152050/
Category: Legal
Published: January 27, 2017

Description: It looks like two New York City men who allegedly raised more than $81 million from investors promised profits from tickets to the Broadway blockbuster musical Hamilton and other high-demand shows just threw away their shot. Joseph Meli and Matthew Harriton and their companies allegedly lured at least 125 investors in 13 states to invest in a Ponzi scheme based on false claims of buying and reselling large blocks of tickets to Hamilton, Adele concerts and other high-demand events, the Securities and Exchange Commission charged Friday. The alleged scammers claimed they had an agreement with Hamilton's producer to buy 35,000 tickets to the musical, and said they would use investor funds to pay part of the purchase cost, according to a SEC federal civil complaint filed in New York's southern federal district. Hamilton has been one of Broadway biggest hits in decades. Tickets to the rap and hip-hop retelling of heroism and plotting by Alexander Hamilton, George Washington, Thomas Jefferson and other women and men involved in the American Revolution regularly sell out for months in advance. Promising to resell the tickets at high profits, Meli and Harriton gave investors written contracts that promised full repayment of initial investments plus a 10% annualized profit, to be paid in less than one year from investment, the complaint charged. Investors allegedly were also promised 50% of any profits from ticket resales that remained after they got their initial investments and 10% return. There was never any agreement to buy and resell tickets, the SEC charged. Instead, Manhattan residents Meli, 42, and Harriton, 52, allegedly diverted money from initial investors in the Ponzi scheme to new investors. The SEC charges they also spent nearly $2 million of investors' money on jewelry purchases, casino payments, private school and camp tuition payments and other personal expenses. "As alleged in our complaint, Meli and Harriton raised millions from investors by promising big profits from reselling tickets to A-list events when in reality they were moving investor money in a circle and creating a mirage of profitability," Paul Levenson, director of the SEC's Boston Regional Office, said in a statement announcing the lawsuit. The Manhattan U.S. Attorney's Office separately said Meli and Steven Simmons, were arrested Friday on charges of conspiracy, securities fraud, and wire fraud. The criminal complaint did not charge name Harriton and did not charge Simmons in the ticket-resale charges relating to the alleged scheme. "While soliciting funds from investors for legitimate-sounding investments Steven Simmons and Joseph Meli were, in fact, running Ponzi schemes, said Deputy U.S. Attorney Joon Kim in a formal statement. Defense attorneys for the three men could not immediately be identified.