Earlier today, a superseding indictment was unsealed in federal court in Brooklyn, charging Robert Cassino, Joseph Passalaqua, and Joseph Rivera with securities fraud conspiracy, wire fraud conspiracy, and securities fraud. The defendants were arrested and are set to be arraigned before United States Magistrate Judge James R. Cho. Raymond John Pirrello, Jr., previously indicted for his involvement in the scheme, is also implicated.
United States Attorney for the Eastern District of New York John J. Durham and FBI Assistant Director in Charge James E. Dennehy announced the charges. "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," stated United States Attorney Durham. He emphasized that his office will prosecute those exploiting individual investors for personal gain.
Durham acknowledged the cooperation of the Securities and Exchange Commission (SEC), New York Regional Office, during the investigation. FBI Assistant Director Dennehy added that at the company's leadership's behest, three defendants allegedly misled investors with false information to steal millions through undisclosed upfront fees.
The indictment details how Pirrello, Cassino, Passalaqua, and Rivera defrauded investors in securities offered by Late Stage Management, LLC (Late Stage). Late Stage claimed to offer "no fee" opportunities to invest in pre-IPO stocks but charged upfront markups between 10-50% of each investment instead. Between March 2019 and July 2022, approximately $528 million was raised from investors by sales offices working on behalf of Late Stage; around $88.6 million was diverted as undisclosed markups.
The charges remain allegations until proven guilty. Those who believe they were victimized by Pirrello or his co-conspirators are encouraged to contact the FBI via www.fbi.gov/Pirrello or call 1-800-CALL-FBI.
The case is managed by the Business and Securities Fraud Section of the U.S. Attorney's Office with Assistant U.S. Attorney Jessica K. Weigel leading prosecution efforts alongside Special Agent Martin Sullivan and Paralegal Specialist Sarah Burn.
Defendants include Robert Cassino from Long Beach, New York; Joseph Passalaqua from Sparta, New Jersey; Joseph Rivera from Elmont, New York; with previously indicted Raymond John Pirrello from Sparta, New Jersey.
