John Cangialosi, Peter Girgis, and Gene Sarabella, also known as “Jerry,” pleaded guilty in federal court in Brooklyn to charges related to a $65 million fraud and money laundering scheme. The three former principals of investment funds faced five counts including conspiracy to commit securities fraud, conspiracy to commit wire fraud, securities fraud, investment adviser fraud, and money laundering conspiracy. They each face up to 60 years in prison when sentenced. The proceedings took place before United States District Judge Carol Bagley Amon.
The announcement was made by Joseph Nocella, Jr., United States Attorney for the Eastern District of New York, and Christopher G. Raia, Assistant Director in Charge at the FBI’s New York Field Office.
“The defendants were the architects of a vast fraud scheme targeting investors here in the Eastern District of New York and all throughout the country,” stated United States Attorney Joseph Nocella. “They hid excessive fees, concealed their identities, and lied about the securities they sold to investors. They then used investor funds to enrich themselves, principally through the purchase of millions of dollars in luxury watches. The Office is committed to protecting the public from predatory fund managers who get rich deceiving investors out of their hard-earned savings.”
Nocella thanked the Securities and Exchange Commission for its cooperation during the investigation.
According to court filings and hearings, Cangialosi, Girgis, and Sarabella operated Max Infinity Management LLC and Elder Fund Management LLC under a boiler-room style call center model. They marketed investments in private companies allegedly planning imminent initial public offerings (IPOs). Investigators found that they misrepresented key facts about their investments’ terms and structure as well as Max Infinity’s operations.
The defendants claimed that Max Infinity would profit only if investors profited through a 20% share upon an IPO; however, it secretly charged significant mark-ups—sometimes over 95%—and paid commissions from investor capital without disclosure. Other false statements included how shares were acquired (often not directly from issuers), promises that investor money would be held in escrow when it was not, claims about due diligence efforts or prior successes with companies like Palantir or Facebook (which went public before Max Infinity existed), and assertions that Max Infinity was registered with the SEC.
Scripts used by employees employed high-pressure tactics on elderly victims promising large returns. The proceeds were laundered through various purchases such as luxury watches.
The U.S. Attorney’s Office for the Eastern District of New York oversees prosecutions of federal crimes across Brooklyn, Queens, Staten Island, Nassau County and Suffolk County from offices located in Brooklyn and Central Islip (official website). It also supports community outreach initiatives and victim assistance programs (official website).
The case is being handled by prosecutors from both the Business and Securities Fraud Section and General Crimes Section within this office (official website).
Defendants:
- John Cangialosi (44), Manalapan, New Jersey
- Peter Girgis (44), Staten Island, New York
- Gene Sarabella (“Jerry”) (37), Monroe, New Jersey
Previously pleaded guilty:
- Enrico Carini (“Ed”) (40), Staten Island
- Caner Otar (“John”) (38), Brooklyn
E.D.N.Y. Docket No. 24-CR-363 (CBA)
