Joseph Meli, et al.
U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23820/ May 1, 2017
Securities and Exchange Commission v. Joseph Meli, et al., No. 1:17-cv-632 (S.D.N.Y. filed Jan. 27, 2017)
Court Orders Preliminary Injunction and Continuing Asset Freeze in Ticket Resale Ponzi Scheme
The Securities and Exchange Commission has obtained a preliminary injunction and continuing asset freeze against two New York City men and four of their companies accused of running a Ponzi scheme with more than $97 million raised from at least 138 investors in 17 states to purchase and resell tickets to high-demand theater performances and concerts.
The preliminary injunction order, entered by the court on April 26, 2017, preliminarily enjoins Joseph Meli and Matthew Harriton and their four purported ticket reselling businesses - Advance Entertainment, LLC, Advance Entertainment II, LLC, 875 Holdings, LLC, and 127 Holdings, LLC - from violating Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and continues the previously-ordered asset freeze.
The SEC alleges in its amended complaint that certain of the defendants solicited investments for the bulk purchase and resale of tickets to events including the Broadway musical Hamilton; Adele, Metallica, and Nine Inch Nails concerts; a concert festival known as Desert Trip (featuring The Rolling Stones, Bob Dylan, Paul McCartney, and other artists); and advance sales for the upcoming Broadway play Harry Potter and the Cursed Child. The defendants allegedly misrepresented to investors that their money would be pooled to buy large blocks of tickets that would be resold at a profit to produce high returns for investors.
The majority of investor funds - $59 million - was allegedly used to make Ponzi payments to prior investors using money from new investors. The SEC alleges that additional investor funds were diverted to enrich Meli and Harriton. The SEC has named seven relief defendants based upon their alleged receipt of investor funds. These are Meli's wife, Meli's mother, three of Meli's companies, and two of Harriton's companies.
The SEC seeks disgorgement of ill-gotten gains together with prejudgment interest, and penalties.
The SEC's case has been handled by Dahlia Rin, Rebecca Israel, John McCann, Marty Healey, and Celia Moore of the Boston Regional Office. The SEC appreciates the assistance of the FBI and the U.S. Attorney's Office for the Southern District of New York.
