Sandy John Masselli, a 63-year-old resident of Columbia, South Carolina, has been sentenced to six years in federal prison for orchestrating a series of complex fraud schemes that spanned six years and resulted in millions of dollars in losses for investors. This case, adjudicated by U.S. District Judge Michael A. Shipp in Trenton federal court, highlights the severe consequences of financial deception and the dedicated efforts of federal authorities to combat financial crime.
Sandy John Masselli, who pleaded guilty to nine counts, including bank fraud, wire fraud, and securities fraud, engaged in deceptive practices through his company, Carlyle Entertainment Ltd., formerly known as Carlyle Gaming & Entertainment Ltd. The sentencing marks the end of a protracted legal battle that began with initial charges in October 2017. The case reflects a significant legal outcome, demonstrating the judiciary’s commitment to addressing high-stakes financial misconduct.
Details of Sandy John Masselli’s Fraud Schemes
The core of Sandy John Masselli’s fraud involved fraudulent claims about Carlyle Entertainment Ltd.’s potential to conduct a lucrative initial public offering (IPO). Masselli solicited millions of dollars from retail investors by promising them access to Carlyle’s stock at discounted prices, with the assurance of substantial returns following a purported IPO on major stock exchanges like NASDAQ and the New York Stock Exchange (NYSE). Investors were enticed by Masselli’s assurances that their investments would be used to prepare Carlyle for a high-profile public offering.
However, the reality was far different from Masselli’s promises. Carlyle was not in a position to execute an IPO on these prestigious exchanges. The company had neither filed the required applications with NASDAQ or the NYSE nor submitted a registration statement to the Securities and Exchange Commission (SEC). Despite knowing this, Masselli continued to deceive investors, leading them to believe their funds were contributing to Carlyle’s IPO preparations. Instead, he used the investments for personal gain.
Personal Misuse of Investor Funds
Sandy John Masselli’s fraudulent activities extended beyond the initial investment deception. After acquiring investor funds, Masselli funneled them into a series of bank accounts under his control. Many of these accounts were opened under fictitious corporate names to obscure the source of the funds. Once the money was laundered through these accounts, Masselli used it for personal expenses rather than the business purposes he had promised.
In addition to misappropriating investment funds, Masselli engaged in a pattern of credit card fraud. He opened multiple credit card accounts and made purchases up to or beyond the credit limits. To avoid immediate repercussions, Masselli made payments from accounts with insufficient funds, which temporarily extended his credit line. This fraudulent activity allowed him to continue making purchases and accumulating debt. On several occasions, Masselli falsely claimed that his credit card accounts had been opened by identity thieves to deflect responsibility for the unpaid balances.
Major Fraud: Kentucky Couple Sentenced for Bank Fraud Scheme
Legal Consequences and Restitution
The legal consequences for Sandy John Masselli reflect the severity of his financial crimes. In addition to his six-year prison term, Judge Shipp has imposed three years of supervised release. Masselli is also obligated to pay $3.2 million in restitution along with an extra $1 million in forfeiture. The restitution is intended to compensate the victims for their financial losses, while the forfeiture addresses the ill-gotten gains from Masselli’s fraudulent schemes.
The case was thoroughly investigated by the FBI, with Special Agent in Charge James E. Dennehy overseeing the investigation in Newark. The SEC’s Division of Enforcement, under the leadership of Gurbir S. Grewal, played a crucial role in addressing the securities fraud aspect of the case. The prosecution was managed by Assistant U.S. Attorneys Eric A. Boden and Alexander E. Ramey from the U.S. Attorney’s Office in Trenton.
The gravity of Sandy John Masselli’s actions was emphasized by U.S. Attorney Philip R. Sellinger, who stated, “A web of lies was used by Sandy Masselli to deceive victims into investing millions of dollars in his company, with substantial returns from an initial public offering that was never going to happen promised. Instead of the money being invested as promised, it was fraudulently spent on himself and his family by Masselli. The substantial sentence imposed today ensures that he is held responsible for selfishly profiting at the expense of innocent investors.”
Sandy John Masselli’s case serves as a powerful reminder of the severe consequences of financial misconduct. It highlights the commitment of federal agencies to uphold the law and protect investors, ensuring that those who exploit others for personal gain are held accountable.
