NEWARK, NJ—A Westfield, New Jersey-based investment adviser was sentenced today to 58 months in prison for defrauding numerous investors, including a union pension fund, of more than $2.4 million by funding his lavish lifestyle with money he claimed to be investing in conservative securities, U.S. Attorney Paul J. Fishman announced.
Carlo Chiaese, 38, of Livingston, N.J., previously pleaded guilty before U.S. District Judge William J. Martini to an information charging him with securities fraud. Judge Martini also imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Chiaese, who had been working in the financial industry since 1999, solicited a number of new clients through his independent investment firm, CGC Advisors LLC, as early as 2008. He drew clients by touting his investment experience and promising to invest their funds in conservative but traditional securities like bonds and mutual funds. Chiaese admitted that between November 2008 and September 2010, he raised more than $2.9 million from individuals and entities in New Jersey, New York and abroad based on his representations. One investment of approximately $1.71 million came from a pension fund containing the pensions of over 850 current and former members of Local 333, United Marine Division, International Longshoreman’s Association—a union made up of members who were employed in the tugboat and ferry business in the New York and New Jersey waterways.
Chiaese admitted that he did not invest any of the victim investors’ money as he promised. Instead, he used over $1.4 million in investor money to pay for personal expenses such as: leases on a Porsche 911 Carrera, Audi Q7 and a Land Rover; his fees at two country clubs; stays at luxury hotels in New York, Florida and St. Thomas; and purchases at high-end retailers like Hermes, Salvatore Ferragamo, Bergdorf Goodman, and Saks Fifth Avenue. Chiaese also made cash withdrawals in excess of $185,000 and transferred over $800,000 to his wife and members of her family.
Chiaese also used at least $280,000 of the investors’ money to repay other investors, including one in London, in Ponzi-scheme fashion.
To conceal his fraudulent conduct, Chiaese sent many of the investors fake trade confirmations and account statements that made it appear that he had invested their money in securities when he had not.
In addition to the prison term, Judge Martini sentenced Chiaese to three years of supervised release and ordered him to pay approximately $2.5 million in restitution.
Sunday, August 21, 2011
Investment Adviser Carlo Chiaese Sentenced to 58 Months in Prison for $2.4 Million Fraud Targeting Union Pension Fund and Other Investors in New Jersey and New York
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Report Securities Fraud by Calling 1-888-482-6825 or by visiting
www.reportsecuritiesfraud.net
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