Jan. 28 (UPI) — Two New York men were charged by the U.S. Securities and Exchange Commission in a Ponzi scheme involving tickets to high demand shows.
The SEC alleged on Friday that Joseph Meli and Matthew Harriton raised more than $81 million from at least 125 investors in 13 states by falsely claiming to pool their money to purchase tickets to Adele concerts and the Broadway musical “Hamilton” to be resold at a profit.
“As alleged in our complaint, Meli and Harriton raised millions from investors by promising big profits from reselling tickets to A-list events when in reality they were moving investor money in a circle and creating a mirage of profitability,” Paul G. Levenson, Director of the SEC’s Boston Regional Office said.
Meli and Harriton used the bulk of the investor funds to make Ponzi payments to prior investors and allegedly diverted almost $2 million for personal purchases including jewelry purchases, private school and camp tuition, and casino payments.
The pair claimed an agreement was in place with the producer of “Hamilton” to purchase 35,000 tickets to the musical and investor money was collected to pay part of that cost with the return on investment promised within eight months, according to the SEC’s complaint.
Investors were allegedly promised full repayment of initial investments plus a 10 percent annualized profit, to be paid in less than one year from investment as well as 50 percent of any profits from ticket resales that remained after they got their initial investments and 10 percent return, USA Today reported.
The SEC alleges that no such agreement or purchase of tickets ever took place.
Meli and Harriton were charged by the SEC in U.S. District Court for the Southern District of New York along with their four alleged ticket reselling businesses named Advance Entertainment, Advance Entertainment II, 875 Holdings, and 127 Holdings.
The U.S. Attorney’s Office for the Southern District of New York also announced criminal charges against Meli in a parallel action.
