Joe Meli, already in prison after entering a guilty plea to a ticket resale Ponzi scheme in 2017, is facing new charges in New York that he participated in a similar scheme following his arrest. The SEC and U.S. Attorney for the Southern District of New York announced that he and James Sinischalchi have been charged with securities and wire fraud, with Sinischalchi arrested on Monday in New York.
“As alleged, Joseph Meli and James Siniscalchi engaged in a scheme to defraud investors by lying about purported access to blocks of Broadway tickets,” reads a quote from U.S. Attorney Geoffrey S. Berman in the announcement of the charges. “As alleged, the acting was all done by the defendants, who posed as legitimate businessmen but appropriated the money they said would be invested in theatre tickets.”
According to the complaints, Sinischalchi served as Chief Compliance Officer of a company that claimed to have access to event tickets to lure investors, but then used money to benefit themselves and family members. Allegedly, they raised $2.7 million from investors with promises of access to tickets to events including Broadway shows like Hello Dolly and Springsteen on Broadway and high profile sports such as the Floyd Mayweather-Conor McGregor fight in Las Vegas. Instead, according to the U.S. Attorney’s Office, monies were diverted including $455,000 going to a close relative of Meli’s and $105,000 sent to a residential management company related to an apartment Meli was leasing.
Due to Joe Meli’s being in headlines from his prior arrest on similar charges, efforts were made to conceal his participation in the alleged scheme. Such efforts included instructing staff to not include Meli on communications with investors, and referring to him as “Keyser Soze,” a reference to the criminal mastermind from the movie The Usual Suspects.
“As alleged in our complaint, investors were lured in with promises of big profits, but Siniscalchi really just took over his cousin’s fraudulent scheme to steal money,” said Paul Levenson, Director of the SEC’s Boston Regional Office. “Even after charging Meli, who is now in prison for his similar scam, the SEC’s investigative team continued working to protect investors from related bad conduct.”
The SEC has charged Sinischalchi with violating antifraud provisions of the federal securities laws and seeks a permanent injunction and financial penalties. Both Sinischalchi and Meli face one count of conspiracy to commit securities fraud and wire fraud, one count of securities fraud, and one count of wire fraud.
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.
Meli’s previous legal troubles saw him sentenced to 78 months in prison followed by three years of supervised release in April of 2018. He was also fined $1.5 million and required to pay restitution to the victims of that scheme. More recently, former sports talk radio host Craig Carton received a 3.5 year prison sentence and requirement to pay $4.8 million in restitution and forfeit $4.2 million in a related case.