Jay Clayton, U.S. Attorney for the Southern District of New York | Department of Justice
Mario Gogliormella, Steven Lacaj, and Karim Ibrahim, also known as Chris Hayes, have pleaded guilty to conspiracy and fraud charges related to their roles in managing L & G Capital Corp., Legend Venture Partners LLC, and associated funds. The announcement was made by Jay Clayton, United States Attorney for the Southern District of New York. Gogliormella and Lacaj entered their pleas before U.S. District Judge Vernon S. Broderick, while Ibrahim pleaded guilty before U.S. Magistrate Judge Henry J. Ricardo. Sentencing will be scheduled before Judge Broderick.
“Our pre-IPO markets are important to investors, entrepreneurs, and our economy,” said U.S. Attorney Jay Clayton. “Their integrity is critical to our continued leadership in technology, healthcare, energy, and other key industries. The defendants used high-pressure sales tactics, false and misleading disclosures, and hidden exorbitant fees to defraud retail investors seeking to invest in private companies that had not yet had initial public offerings. The women and men of our Office and our law enforcement partners continue to focus on our pre-IPO markets and our listed small-cap markets. Our message is clear: marketing and trading in securities of new and smaller companies does not give you a pass to commit fraud.”
According to court documents and statements made during proceedings, the three defendants operated a scheme targeting non-professional investors through a group of private funds known as the StraightPath Funds and the Legend Funds. They promised access to shares in privately held companies expected to go public soon at favorable prices but misrepresented key facts about fees and pricing.
The investigation revealed that the trio sold shares at inflated prices without informing investors about markups or commissions. These actions allowed them to raise approximately $185 million from hundreds of investors nationwide. Nearly $28 million was diverted for personal use by the defendants through undisclosed markups on share prices; additionally, at least $17.5 million was paid out as fees or commissions despite claims that no such charges would apply.
The operation involved using referral agents who contacted potential investors with aggressive sales pitches based on scripts referred to internally as “The Bible.” Contrary to assurances given during these calls—that neither they nor their agents would profit unless investors did—the agents received upfront commissions ranging from 10%–15% of investment amounts plus portions of carried interest when investments exited.
Initially run as part of StraightPath Venture Partners Inc., the scheme continued under Legend Venture Partners LLC after regulatory scrutiny led StraightPath’s closure in early 2022 following subpoenas issued by the Securities and Exchange Commission (SEC). Three principals from StraightPath—Michael Castillero, Francine Lanaia, and Brian Martinsen—were previously convicted in connection with similar conduct.
Gogliormella (48), Lacaj (28), both from New York City areas, and Ibrahim (36) from Queens each pleaded guilty to one count of conspiracy involving securities fraud, wire fraud, and investment adviser fraud—which carries up to five years imprisonment—and one count of investment adviser fraud with an additional maximum five-year sentence possible.
Actual sentencing will be determined by judicial discretion within statutory limits set by Congress.
Jay Clayton commended the work done by the U.S. Postal Inspection Service on this case and acknowledged support from the SEC which has initiated a parallel civil action against those involved.
The prosecution is being managed by Assistant U.S. Attorneys Adam S. Hobson and Matthew R. Shahabian from the Securities and Commodities Fraud Task Force.
