Craig Carton, WFAN Host, Arrested for Investment Fraud

By:
Chris Gaetano
Published Date:
Sep 6, 2017
SECURITIES-AND-EXCHANGE-COMMISSION-facebook

The SEC announced charges against Craig Carton, co-host of the WFAN sports talk show Boomer and Carton, whom the FBI arrested this morning on a number of investment fraud-related charges. The complaint said that Carton had accumulated about $2.5 million worth of gambling debts, both to casinos and other third parties, many of which were starting to come due. In a September 2016 email to Joseph Meli, his associate in the scheme, Carton allegedly said that he had around $3 million in total debts (Meli has since also been charged by the SEC for a similar scam involving 'Hamilton' tickets). There was $700,000 of investor money that he said he'd risked and lost, owed another $825,000 to a particular individual, and owed further $500,000 to two casinos, which needed to be repaid in just a couple of days (he sent the email on the 6th and said he needed to pay the casinos back by the 12th). 

In response, he and Meli began soliciting investors in an enterprise that was supposedly based on buying large blocks of tickets to upcoming concerts of the singer Adele, then reselling them at a markup,  based on the false premise that they had a deal with her management company. He told investors that if they funded this enterprise they would see returns of 1.3 to 1.5 percent within a few months. The SEC said they were able to get one individual to sign on, giving the pair $1 million, about $730,000 of which was used to repay Carton's gambling debts. When the investor asked about his money a few months later, Meli falsely claimed he had a deal with JPMorgan Chase Bank to resell the ticket inventory to them (of course, there was no such deal to sell tickets he did not have). 

In the meanwhile, the two had approached a hedge fund with the same pitch, and received $2.6 million in investment money, which was understood to be the first of several payments of an overall $10 million investment (the fund had been told there was an additional $30 million worth of commitments from other investors). The Hedge Fund understood it was investing in pooled interests in blocks of tickets to the 2017-18 concert tours of Katy Perry, Justin Bieber, Roger Waters, and Metallica, but this never happened. Instead, the pair used part of the funds, plus a $500,000 personal loan, to pay back the first investor, who had started asking about his money. The remainder was used to pay back the aforementioned loan, plus an additional $600,000 in casino debt. 

The two had also convinced the hedge fund to investment $2 million in a separate deal to investment in a purchase and resale of tickets for upcoming Barbara Streisand and Metallica concerts. This money was sent to a legitimate venue company, which then was tricked into sending the money to another entity that was controlled by Carton. 

All these schemes were driven by fake documentation used to bolster their claims that there was actually something to their hollow promises, some of which involved forged signatures from legitimate people. 

“As alleged in our complaint, investors were lured with promises of big profits from resales of A-list concert tickets, but little did they know their money was being used to cover Carton’s gambling debts among other things,” said Paul Levenson, Director of the SEC’s Boston Regional Office.

The SEC’s complaint seeks disgorgement of ill-gotten gains plus interest and penalties against Carton and Meli along with six businesses they control: Advance Entertainment LLC, AdvanceM Ltd., Misoluki Inc., Misoluki LLC, Ticket Jones LLC, and Tier One Tickets LLC.

In a parallel action, the U.S. Attorney’s Office for the Southern District of New York today announced criminal charges against Carton.

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