The SEC has charged two cousins for engaging in a Broadway ticket investment scheme to defraud investors of $2.7 million, one of whom is already in prison serving time for an identical crime.
The US Attorney’s Office for the Southern District of New York said Joseph Meli, 44, and James Siniscalchi, 46, were charged with securities fraud, wire fraud, and conspiracy to commit securities and wire fraud in connection with a Broadway ticket investment scam. The two, who are first cousins, allegedly told investors they would use their funds to purchase tickets to Broadway shows to resell on the secondary market, but instead took it for their personal use.
While Siniscalchi was arrested for alleged role in the scam, Meli is presently incarcerated for his role in a previous Broadway ticket investment scheme. In April 2018, Meli was sentenced in Manhattan federal court to 78 months in prison for soliciting more than $100 million in investments from 130 investors through false representations.
Meli had used those funds to buy a $3 million house in East Hampton, New York, a 2017 Porsche convertible, and expensive watches and jewelry, according to court documents. He was ordered to forfeit approximately $104.8 million, which represented the amount of proceeds obtained as a result of his fraudulent scheme, and was ordered to pay restitution.
In the most recent alleged scheme, Siniscalchi and Meli are each charged with one count of conspiracy to commit securities fraud and wire fraud, one count of securities fraud, and one count of wire fraud.
According to the SEC complaint, Meli and Siniscalchi falsely represented to partners in a business entity that they owned a large number of tickets to live events, or intended to purchase a large number of tickets to live events, and would sell those tickets to the entertainment company using investor money. And they promised investors a share of these profits.
But the SEC said that Meli and Siniscalchi failed to invest the investor funds as promised and diverted them for their own personal use, including sending $455,000 to a close relative of Meli’s, and $105,000 to a residential management company that managed an apartment Meli was leasing.
“As alleged, Joseph Meli and James Siniscalchi engaged in a scheme to defraud investors by lying about purported access to blocks of Broadway tickets,” US Attorney Geoffrey Berman said in a statement, adding that the two “posed as legitimate businessmen but appropriated the money they said would be invested in theatre tickets.”
The conspiracy count carries a maximum sentence of five years in prison and a maximum fine of $250,000, or twice the gross gain or loss from the offense. The securities fraud count carries a maximum sentence of 20 years in prison and a maximum fine of $5 million, or twice the gross gain or loss from the offense. The wire fraud count carries a maximum sentence of 20 years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense.
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