U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23975/ October 31, 2017
Securities and Exchange Commission v. Joseph Meli, et al., No. 17-CV-632 (S.D.N.Y. filed Jan. 27, 2017)
Securities and Exchange Commission v. Craig H. Carton, et al., No. 17-CV-6764 (S.D.N.Y. filed Sep. 6, 2017)
Defendant in SEC Cases Involving Ticket Resale Investment Schemes Pleads Guilty to Securities Fraud in Criminal Case
On October 31, 2017, Joseph Meli of New York City pled guilty in federal district court in Manhattan to securities fraud in connection with a Ponzi scheme involving purported resales of tickets to popular Broadway shows and concerts. The criminal case arises from the same conduct alleged in two Securities and Exchange Commission parallel civil enforcement actions filed against Meli earlier this year.
Meli was arrested on fraud charges in January 2017. As part of the fraud, Meli provided investors with fake agreements containing fraudulent signatures that claimed to show Meli's company had agreements with various production and management companies to purchase large blocks of tickets.
Meli is currently scheduled to be sentenced in the criminal case in January 2018.
In January 2017 and September 2017, the SEC filed two enforcement actions against Meli in federal district court. The SEC's amended complaint in the first action, also filed against Matthew Harriton of New York City and Meli or Harriton's four purported ticket reselling businesses, alleges that Meli and certain other defendants solicited investments for the bulk purchase and resale of tickets to events including the Broadway musical Hamilton, Adele and Metallica concerts, a concert festival known as Desert Trip (featuring The Rolling Stones, Bob Dylan, Paul McCartney, and other artists), and the upcoming Broadway play Harry Potter and the Cursed Child. The majority of the more than $97 million raised from investors was allegedly used to make Ponzi payments to prior investors and to enrich Meli, Harriton, and Meli's wife and mother. Meli's wife and mother are both named as relief defendants, along with three of Meli's companies and two of Harriton's companies, based on these parties' alleged receipt of investor funds. On April 26, 2017, the court entered a preliminary injunction and continuing asset freeze against Meli and his co-defendants. The SEC's second action, also filed against New York sports radio personality Craig Carton and six of Meli or Carton's companies, similarly alleges that Carton and Meli falsely claimed to investors they had access to large blocks of face value tickets to popular concert performances. Both SEC actions charge Meli and his co-defendants with securities fraud in violation of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.
The SEC's cases are being handled by Dahlia Rin, John McCann, Martin Healey, and Celia Moore of the Boston office. The SEC appreciates the assistance of the FBI and the U.S. Attorney's Office for the Southern District of New York. The SEC's charges against all parties remain pending.