In parallel proceedings, today the FBI arrested Lattanzio and he was charged by complaint with three counts of wire fraud and two counts of securities fraud by the U.S. Attorney’s Office for the District of New Jersey. In addition, the Securities and Exchange Commission filed a civil complaint in the United States District Court for the District of New Jersey against Lattanzio and the Black Diamond investment management companies.
Montesanti has not been charged with a crime.
“We allege this was not a legitimate investment gone bad but a scam by these fraudsters to line their pockets and live lavishly,” said Acting Attorney General John J. Hoffman. “Today’s order by the Bureau of Securities, stemming from the parallel federal and state investigations, will help bring these alleged scam artists of investment fraud to justice.”
“After inducing investors to entrust them with millions of dollars, as the Bureau’s findings show, these scammers spent obscene amounts of investor money on expensive jewelry and other luxuries,” said Acting Director of Consumer Affairs Steve Lee.
Bureau of Securities Chief Laura H. Posner said, “Lattanzio, Montesanti and the Black Diamond Entities lured investors into believing that they could provide access to multiple million dollar credit lines and that investing in Black Diamond was a safe investment that generated significant 18% annual returns. Instead of using investor funds as promised, Lattanzio used the money as if it was his own.”
Bureau Chief Posner made the following findings of fact, among others, as set forth in the Summary Penalty Order:
In addition to the $2.5 million civil monetary penalty, the Penalty Order prevents the respondents from offering investment advice or selling securities unless registered with the Bureau.
Investigators Peter C. Cole and Glenn Henry of the New Jersey Bureau of Securities conducted the investigation of this matter.
The Bureau thanks the U.S. Securities and Exchange Commission’s New York Regional Office, under the direction of Andrew Calamari, and the U.S. Attorney’s Office for the District of New Jersey, under the direction of U.S. Attorney J. Fishman.
The Bureau of Securities can be contacted toll-free within New Jersey at 866-I-INVEST (866-446-8378) or from outside New Jersey at 973-504-3600. The public is encouraged to visit the Bureau’s website at www.NJSecurities.gov.
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