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TRENTON
– Attorney General Anne Milgram, Criminal
Justice Director Gregory A. Paw and Bureau
of Securities Chief Vincent J. Oliva announced
that a Millstone Township man was indicted
today on charges he stole $690,000 from
more than two dozen victims who invested
millions of dollars in his fraudulent get-rich-quick
scheme.
The
New Jersey Bureau of Securities simultaneously
filed a lawsuit in Superior Court in Monmouth
County seeking restitution and penalties
against the defendant, Michael D’Angelo,
46, of Millstone Township, his company,
CMR Mngt. Group LLC, and two other owners
of CMR. The Bureau has requested that the
court freeze the assets of D’Angelo,
his wife and CMR. The indictment and lawsuit
stem from an investigation by the Bureau
of Securities.
“We
charge that Mr. D’Angelo preyed ruthlessly
on investors, taking their life savings
in some cases and tricking others into re-mortgaging
their homes to invest large sums in his
fraudulent scheme,” said Attorney
General Milgram. “He would show investors
his luxury home, and promise to make them
rich too. What he didn’t tell them
is that he was living the good life by stealing
their hard-earned money.”
According
to Director Paw, the Division of Criminal
Justice obtained a state grand jury indictment
today charging D’Angelo with first-degree
money laundering, second-degree securities
fraud and second-degree theft by failure
to make required disposition of property
received. It is charged that D’Angelo
commingled investor funds, using funds from
new investors to pay old investors in the
typical fashion of a Ponzi scheme. He allegedly
diverted large sums into his wife’s
bank accounts to pay the couple’s
personal expenses including, among other
things, the mortgage payments for their
lavish home and payments on high-end cars.
First-degree
money laundering carries a maximum sentence
of 20 years in prison and a $500,000 fine,
while second-degree crimes carry a sentence
of up to 10 years and a $150,000 fine. The
indictment is merely an accusation and the
defendant is presumed innocent until proven
guilty.
“The
Division of Criminal Justice is working
closely with the Bureau of Securities to
send a strong message to those who would
defraud New Jersey investors: We’ll
prosecute you and make you pay,” said
Division of Criminal Justice Director Paw.
“The
alleged actions of these defendants illustrate
how unsuspecting investors can fall victim
to fraud perpetrated by persons they knew
beforehand,” said Bureau of Securities
Chief Oliva. “The defendants solicited
friends, neighbors and business acquaintances
to invest in their scheme, knowing a level
of trust had already been established. They
exploited this trust for their own financial
gain at the expense of investors.”
The
civil complaint accuses D’Angelo,
CMR and two other company owners, Richard
Sladek, 43, of Plainsboro, and Charles T.
Barbero, 43, of Sayreville, of violating
the New Jersey Uniform Securities Law by,
among other things, engaging in a scheme
to defraud investors, acting as unregistered
broker-dealers, and selling unregistered
securities.
The
complaint alleges that between January 2004
and January 2006, the defendants took approximately
$3,260,000 from 26 investors, including
at least 24 New Jersey residents. Approximately
$2,570,000 has been returned to investors,
including payments totaling $1,946,100 that
were made to some of the investors after
the defendants became aware that the Bureau
of Securities was conducting an investigation.
In return for the payments, the investors
were required to sign fraudulent releases
stating that the defendants had not engaged
in fraud or sold the investors any securities.
D’Angelo
is president of CMR. He and the other two
owners originally held equal shares of CMR,
but in August 2005, D’Angelo became
95 percent owner, leaving Sladek and Barbero
with 2 ½ percent interests. D’Angelo
managed the business, maintaining the books,
soliciting investors, issuing checks to
investors on behalf of CMR, and responding
to investor inquiries. CMR initially had
an office in Clark. It moved to Sayreville,
and later to D’Angelo’s home.
According
to the complaint, the defendants offered
investments in the CMR “Capital Enhancement
Program,” promising a guaranteed rate
of return of 5 percent interest per month,
or 60 percent annually, with return of the
investor’s principal after 12 months.
Investors were told their money was absolutely
safe because it was held in “non-depletion
funds” or “non-accessible”
bank accounts. Investors were given conflicting
stories about how the profits were generated,
including foreign currency trading, unspecified
activity involving Switzerland, U.S. federal
government money manipulation, and trading
in large blocks of bank notes.
Typically,
investors received two or three 5 percent
payments and were then approached about
rolling over their investment into a second
CMR program that promised a return of 15
percent interest per month, or 180 percent
annually. This program made few, if any,
payments to investors. A variety of excuses
were made to investors for the lack of interest
payments, including that their “guy
in Switzerland” fell and broke his
leg on the way to the bank, and that the
package was accidentally sent to Swaziland
instead of Switzerland.
Attorney
General Milgram credited Investigator Richard
Smullen, Investigator Isaac Reyes, Supervising
Investigator Michael McElgunn, and Chief
of Enforcement Richard Barry for conducting
the investigation for the Bureau of Securities.
She also credited State Investigator Noelle
Holl of the Division of Criminal Justice
for conducting a separate investigation
for the Division of Criminal Justice. She
thanked Deputy Attorney General and Assistant
Section Chief Victoria Manning and Deputy
Attorney General Christopher W. Gerold for
filing the lawsuit for the Bureau.
Attorney
General Milgram credited Deputy Attorney
General Patrick Flor for presenting the
case to the state grand jury for the Division
of Criminal Justice – Major Crimes
Unit.
The
indictment was handed up to Superior Court
Judge Maria Marinari Sypek in Mercer County,
who assigned the case to Monmouth County,
where D’Angelo will be ordered to
appear at a later date to answer the charges.
Copies
of the indictment and the civil complaint
are available with this press release on
the Attorney General’s Web site at
www.njpublicsafety.com.
Oliva
noted that anyone offering to sell securities
in the state must be registered with the
New Jersey Bureau of Securities, and in
many instances, the security itself must
also be registered before it can be offered
to investors.
“Always
check with the Bureau to verify that the
security and the person offering it are
registered with us, even if the seller is
a friend or the investment is recommended
by someone you know,” Chief Oliva
said.
The
Bureau of Securities can be contacted toll-free
within New Jersey at 1-877-I-INVEST (1-877-446-8378)
or from outside New Jersey at 973-504-3600.
The Bureau’s web site is located at
www.njsecurities.gov.
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