The U.S. Department of Justice charged a 48-year-old barred broker from Manalapan, N.J., with defrauding older investors out of at least $1 million and fraudulently obtaining a COVID-19 pandemic loan.
The justice department filed charges in federal District Court in Newark, N.J., on August 17 of wire and mail fraud against Anthony Mastroianni Jr. The Securities and Exchange Commission filed parallel charges.
According to the justice department and the SEC, Mastroianni defrauded at least 10 investors by selling them bogus promissory notes in his company Global Business Development & Consulting Corp., beginning as early as 2017 and continuing until August 2022. The SEC complaint says those investors ranged in age from 64 to 82. The notes promised exorbitant interest rates ranging from 50% to 175%.
Instead of investing the money as promised, Mastroianni used investor money on personal expenses, including household rent, automobile payments, credit card bills, and cash withdrawals, the justice department says.
Its complaint also says Mastroianni exploited the ongoing global pandemic by submitting a false and fraudulent application to obtain $96,300 from a federal COVID-19 emergency relief loan meant for distressed small businesses. As with his investment fraud scheme, Mastroianni misused the loan proceeds to make personal purchases and cash withdrawals, the justice department maintains.
In 2016, the Financial Industry Regulatory Authority (FINRA) barred Mastroianni from associating with any registered broker-dealer after he refused to appear for testimony to answer allegations of, among other things, excessive trading in an elderly customer’s account.
Each count of mail and wire fraud carries a maximum potential sentence of 20 years in prison and a fine of up to $250,000, or twice the gross loss or gain caused by the offense.
The SEC’s complaint charges Mastroianni and Global with violating the antifraud provisions of federal securities laws, and seeks disgorgement of ill-gotten gains with prejudgment interest, civil penalties and permanent injunctive relief.