The Securities and Exchange Commission barred two former brokers who were sent to prison for their roles in a decade-long Ponzi scheme, according to Financial Advisor.
The SEC said 46-year-old Christopher Parris and 43-year-old John Piccarreto, from Rochester, New York, agreed to a settlement stipulating that they be barred from the securities industry after taking part in the scheme.
Both men pleaded guilty to 2021 to one count of conspiracy to commit mail fraud. Piccarreto also pleaded guilty to one count of making and subscribing to a false tax return.
Parris was sentenced to 220 months in prison, while Piccarreto was sentenced to a combined prison term of 84 months. Prosecutors said the two were among a larger group that raised about $115 million from about 1,000 investors who were persuaded to transfer their savings into entities owned by the defendants.
The investors were given false promises that their money would be used to operate businesses in fields such as financial services, insurance, real estate development and medical laboratories, the court said. The SEC said most of the rest of the incoming investor money was used to finance lavish lifestyles.
The SEC settlement detailed the roles of Parris and Piccarreto in the scheme. Financial Advisor reported that Parris and a co-conspirator “bought took over books of business of retiring investment professionals from around the country.” They then advised the “newly acquired clients” to withdraw their savings and invest it in issuers he or his associates controlled, the agency said. The operators of these issuers, the SEC said, were either limited or non-existent, and controlled by Parris and the co-conspirator and mainly served as “entities to raise money from investors to perpetuate the Ponzi scheme to raise money for improper purposes.”
“Parris and the co-conspirator made false and misleading representations and promises, and material omissions, in inducing these investors to invest in promissory notes, preferred stock offerings, or other investment offerings on behalf of issuers that Parris and the other individual had created,” the SEC said.
According to the SEC, Piccarreto was associated with First American Securities, a dually registered broker-dealer and investment advisor. The commission said he admitted to participating in the Ponzi scheme with others from January 2017 to June 2018, which defrauded roughly 400 investors out of about $18 million. Piccarreto was reported to have solicited and sold securities in the bogus issuers to at least eight investors, bilking them out of nearly $600,000.
The attorneys at Hyman Cotter have decades of experience dealing with securities fraud cases and have a deep understanding of how capital markets and financial service firms are intended to work to protect investors. If you think your financial professional or firm engaged in misconduct that caused you investment losses, contact Hyman Cotter at (833) 665-0784 or through our online contact form for a no-cost evaluation of your matter.
