Earlier today, a federal court in Brooklyn unsealed an indictment, revealing that three sales executives have been charged in a huge fraud scheme. The three defendants—Robert Cassino, also known as “Bobby Cassino,” Joseph Passalaqua, and Joseph Rivera—are facing serious charges, including securities fraud conspiracy, wire fraud conspiracy, and securities fraud. All three were arrested and are being arraigned today before a federal judge. They are accused of lying to investors and stealing millions of dollars from them for their own benefit.
The scheme also involved Raymond John Pirrello, a previously indicted individual, who worked closely with Cassino, Passalaqua, and Rivera. Pirrello, known as “Ray John,” had been part of the fraud, but the latest charges expand the scope of the investigation to include the three new defendants.
John J. Durham, the United States Attorney for the Eastern District of New York, and James E. Dennehy, Assistant Director in Charge of the FBI’s New York Field Office, were both quick to announce the charges. They promised to thoroughly prosecute the defendants for their alleged crimes and emphasized the harm done to investors.
The Fraudulent Scheme Unveiled
The defendants are accused of participating in a scheme to mislead and defraud investors through a company called Late Stage Management, LLC, also known as Late Stage. Late Stage was a New Jersey-based company that managed investment funds. It promised investors the chance to purchase “Pre-IPO” stocks, or shares in companies that were expected to go public soon. The company told investors that these investments had no fees involved.
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However, as it turns out, Late Stage was lying about its fee structure. In reality, Late Stage charged investors hidden upfront fees, called “markups,” which ranged from 10% to 50% of each investment. These fees were never disclosed to investors and were kept secret. The money collected through these markups was then funneled to the defendants and their co-conspirators.
Between March 2019 and July 2022, the sales offices working for Late Stage raised around $528 million from investors. Of that amount, approximately $88.6 million in undisclosed markups were stolen by Pirrello, Cassino, Passalaqua, Rivera, and their colleagues. The defendants allegedly used this money for their own personal gain, lying to investors about how their money was being used.
How They Deceived Investors
To keep the fraud hidden, the defendants made false promises and misrepresentations to investors. They claimed that the only time Late Stage would profit from an investment was when the company went public or was sold to a larger business. At that point, they said, Late Stage would earn a 20% share of any profits made by investors.
However, this claim was entirely false. Late Stage was actually taking large upfront markups from each investment, without telling investors. The charges suggest that Cassino, Passalaqua, and Rivera worked at different sales offices connected to Late Stage, including Pre IPO Marketing, Prior2IPO, and B4IPO. These offices were responsible for contacting and convincing potential investors to put money into the company.
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The defendants, as part of their roles in these sales offices, allegedly misled investors by presenting the investment opportunity as risk-free, even though they were secretly taking large amounts of money for themselves. By making false claims about fees, they took advantage of investors’ trust and stole millions of dollars in the process.
The government’s case is being handled by the Business and Securities Fraud Section of the United States Attorney’s Office. Assistant United States Attorney Jessica K. Weigel is in charge of the prosecution, with help from Special Agent Martin Sullivan and Paralegal Specialist Sarah Burn. These legal experts are working hard to ensure that the defendants face the full consequences of their actions.
The Defendants’ Charges
The three sales executives—Cassino, Passalaqua, and Rivera—now face serious charges and must answer for their roles in this massive fraud scheme. Their actions have harmed many innocent investors who trusted them, and they will be held accountable under the law.
This case highlights the risks involved in investing and the importance of being cautious when someone offers seemingly perfect opportunities. Investors are reminded to always verify claims and ask questions about fees and costs before making any financial decisions.
