Big news has taken first places in newspapers and current events recently. “Big names” were spotted in the Ponzi scheme with hit Broadway musical “Hamilton”. The same “big names” invested a pretty penny in the blocks of tickets and were promised to get money back plus 10% surcharge. Now, these billionaires demand money back.
Among the “big names” are Paul Tudor Jones – an American investor, hedge fund manager and Michael Dell – an American business magnate, investor.
According to the informed person, more than 125 people joined this list. The Securities and Exchange Commission reported that scammers managed to end up gathering over $81 million.
In fact, it’s not a commonplace that art-lovers, experienced highly skilled investors are involved in such suspicious deal. Still, the fraud is the fact. The victims still demand their money back. “The suspected” is the most interesting part.
Read more about greatest financial frauds here.
Bold Scam “In Black”
Fraudsters contacted people and encouraged them to buy blocks of tickets to the hottest shows on the Broadway. “Hamilton” was the top-requested musical that pushed prices the highest ever on Broadway!
Who managed to cause such a bold scam? Three men have been charged – Joseph Meli, Steven Simmons, and Mark Varacchi. Mass media reported that Meli allegedly confirmed participation and support of the Hamilton producer in the scam. Still, there is still no data confirming this saying.
Promising to benefit from the investments, Meli and Harriton, Meli’s business partner, lured more than 125 investors from 13 states with written contracts on the tempting conditions.
According to Ponzi scheme, the accused men used new investments to pay off the promised profit to the old investors. Still, along with these payments, they were also spotted in jewelry center, Atlantic City casino, and other places connected with personal expenses.
Despite allegations, Meli and Simmons were released on $1 million bail packages secured by personal property.
The third accused fraudster, Mark Varacchi, pleaded guilty to fraud and was also released on $250,000 bail. Mark Varacchi, an investment fund manager from Connecticut, hit Meli and Simmons to get financial help. He had to repay $4.2 million to his investors and was looking for any kind of help. Meli’s lawyer hadn’t confirmed this fact yet.
Mysterious Informant or Dark Horse
Last year the Federal Bureau of Investigation received a criminal complaint from the mysterious informant.
The informant confessed his participation in Meli’s affair to raise money with the help of fake investments and promised to help in the investigation. The name of the mysterious informant was Mark Varacchi.
During 2 years Meli and others dealt with the scam. Meli plugged all his connections in the music industry to cooperate with Wall Street traders. He even tried to ingratiate himself with show’s producer to sell bulk tickets but was promptly rebuffed.
As the show started in August 2015, Meli decided to promote. He contacted the “big name investor” promising to introduce him to the show’s producer. After several weeks of negotiating, the “big name investor” transferred $3.5 million to the Meli’s company to purchase the tickets.
Fake “Trustworthy” Lure
Along with the “big name investor” cooperation, Meli decided to work with the small fish. As tempting bait, he used a fact that high-profile investors such as Och-Ziff also invested funds in the bulk tickets purchase. Some victims confirmed that Meli even showed a “real” contract with h the hedge fund’s name on it.
Information can be accepted, as one of the real Och-Ziff investors, namely, an executive, Boaz Sidikaro is a friend of Meli. Still, he refused to give any comments.
The fact is that there is no proof that investors were sure that they invest money in the real scam. Ponzi schemes can be tricky but they all have their end.
While tabloids still chew this story over, the investors wait for their money-back, Personal Money Service encourages people to be cautious about all kinds of financial operations, schemes, and investments.
The financial world is a tricky thing and it’s crucial to be aware of all suspicious subjects and deals.
P.S.: Also read about recent Lending club scandal.