Deceptive practices in the world of Pre-IPO investing have led to charges against three sales executives, as a federal court in Brooklyn unsealed a superseding indictment revealing securities and wire fraud conspiracy, along with securities fraud, earlier this week. The individuals, Robert Cassino, Joseph Passalaqua, and Joseph Rivera, were taken into custody and faced their arraignment before U.S. Magistrate Judge James R. Cho, joining their affiliate Raymond John Pirrello, Jr. who was previously indicted for his role in the same scheme, according to a statement by the United States Attorney's Office for the Eastern District of New York.
"The defendants repeatedly lied to investors about the costs associated with their investments and diverted millions of dollars in undisclosed mark-up fees to their sales offices," United States Attorney John J. Durham said, evidencing a commitment to prosecute those exploiting individual investors for personal gain; the Securities and Exchange Commission (SEC) was thanked for its cooperation and assistance during the investigation, as detailed by the U.S. Attorney's Office. Late Stage Management, LLC, the New Jersey-based firm at the heart of the allegations, promoted "no fee" Pre-IPO investment opportunities while clandestinely profiting from significant undisclosed upfront fees ranging between 10-60% of each investment, contributing to the siphoning off of about $88.6 million from unsuspecting investors.
FBI Assistant Director in Charge James E. Dennehy described the alleged ploy as a betrayal of investor trust, with company leadership pushing the fraudulent narrative to enrich themselves at their clients' expense. The FBI's unwavering stance against such financial hypocrisy is clear; individuals manipulating investments for personal enrichment will be pursued. As per the details of the superseding indictment, the operations were not a mere fluke of miscommunication but an orchestrated effort by leaders at Pre IPO Marketing, Prior2IPO, and B4IPO, helmed by Cassino, Passalaqua, and Rivera, respectively, to drive investor funds into their own pockets by marketing lies.
Authorities are aiming for accountability in this pronounced deception; however, as with any indictment, the charged parties are presumed innocent until proven otherwise. Victims or those suspecting victimization by the named defendants or their co-conspirators are encouraged to reach out to the FBI at www.fbi.gov/Pirrello or call 1-800-CALL-FBI, as the agency continues to peel back layers revealing the extent of the fraud. The case is under the management of the Office’s Business and Securities Fraud Section, spearheaded by Assistant United States Attorney Jessica K. Weigel, with Special Agent Martin Sullivan and Paralegal Specialist Sarah Burn lending their expertise to the prosecution team.
