A Glen Cove man and his business partner were arraigned on Wednesday on charges that they stole $436,000 from investors who believed they were investing in pre-initial public offering stock for high-profile tech companies, Nassau County District Attorney Madeline Singas said.
Singas’ office charged Peter Quartararo, 56, of Glen Cove, with five counts of grand larceny in the second degree, one count of grand larceny in the third degree, one count of conspiracy in the fourth degree and one count of scheme to defraud in the first degree. If convicted on the top count, the maximum sentence is five to 15 years in prison. Also charged is Quartararo’s business partner Paul Casella, 54, of East Meadow.
The district attorney’s office said that the U.S. Securities and Exchange Commission referred the case to the local authorities earlier this year.
According to Singas, in April 2019 Quartararo met with four investors and told them that he had access to “pre-IPO” or pre-initial public offering stock in the companies Peloton, WeWork and/or Airbnb for approximately $2 a share. Quartararo told them that when the companies later went public, he would sell the shares and give the profits to the victims, less capital gains taxes.
Each victim allegedly gave Quartararo between $72,000 and $200,000 in checks with the understanding that the funds would be used to purchase the pre-IPO shares, according to the district attorney’s office.
In reality, Quartararo had been barred from operating as a stock broker in March 2013 by the Financial Industry Regulatory Authority, and the SEC later confirmed that no shares of IPO stock in Peloton, WeWork and Airbnb were ever purchased by Quartararo or Casella.
Instead, the victims’ checks were deposited into accounts controlled by Quartararo’s father, Leonard, and Casella. These funds were then allegedly used by the men to purchase food, travel and vehicles, including a 2020 Mercedes-Benz SUV and the down payment on Quartararo’s Maserati automobile. Several large cash withdrawals were also made by Quartararo’s father.
“These defendants allegedly conned investors to give them hundreds of thousands of dollars promising high returns from prominent companies, but instead they pocketed the funds to support their lavish lifestyles,” Singas said.
“Investment frauds cost innocent Americans billions of dollars each year and I encourage every investor to verify the credentials and licenses of any financial professional they work with and to report any suspicious activity to my office.”
The case is being prosecuted by Senior Investigative Counsel Richard Sikes of the Financial Crimes Bureau. The district attorney’s Civil Forfeiture Bureau has assisted in identifying any available assets. Quartararo is being represented by Gerard Donnelly of Hauppauge and Casella is being represented by Joseph Murray of Kew Gardens.