Jason Nissen, the former CEO of the National Event Ticket Company (NECO) was handed a 27 month sentence from U.S. District Judge Paul Engelmeyer in Manhattan Friday after pleading guilty to a single count of wire fraud related to a $71 million Ponzi scheme involving his business.
“Somehow I lost my way in trying to keep my company afloat,” Nissen said. “I always believed things would work out.”
“I have found your case a particularly difficult and tragic one,” Engelmeyer said in court, according to Bloomberg. He pointed out that Nissen undertook the fraud in an attempt to save his business and that he contacted his victims and reported his crime to prosecutors before they approached him.
While Nissen had “perpetrated a fraud on a massive scale,” Engelmeyer noted that the onetime New York teacher had no prior criminal record and a family – including two young children and a wife who attended the hearing while eight months pregnant – before announcing the sentence – which was substantially less than the eight to 10 years the sentencing guidelines called for.
The charges against Nissen stemmed from his using cash from new investors to repay earlier investors and keep his company afloat. While investors were told that their money was being put towards the purchase of tickets to premium events like the musical Hamilton on Broadway and the Super Bowl, the actual number of tickets purchased was far less than he was telling them, diverting the rest of the funding to pay back others. Charges were filed in the spring of 2017, with NECO filing for bankruptcy protection soon after in June. After initially pleading not guilty, he entered a guilty plea in May of 2018.
Prosecutors had pushed Engelmeyer to hand down a punishment within the sentencing guidelines, citing the “massive scale of the losses” investors felt combined with his “concerted, calculated and sustained effort” to lie to keep the scheme under wraps warranted a far harsher penalty than the one eventually handed down.
“The defendant’s serious and exploitative criminal conduct cries out for severe punishment to promote respect for the law and to provide just punishment for his offenses,” prosecutors said in a sentencing memo. “He engaged in this scheme without regard to the devastating effect his crime had on his victims.”