Two men have been charged in New York with running an $81m (£65m/€76m) Ponzi scheme that targeted people eager to resell tickets to ‘Hamilton’ and other major shows.
According to a federal complaint, Joseph Meli and Matthew Harriton raised the cash from 125 investors across 13 US states. More than $50m was directed toward personal purchases such as jewellery, school and camp tuition.
The Securities and Exchange Commission (SEC) said the pair began luring investors in January 2015. They told investors they would pool their money to buy tickets to popular shows such as ‘Hamilton’ in bulk, and then resell those tickets at a higher price, the complaint states.
The complaint said investors were promised that they would get 10 per cent annualised profit within one year of the investment. They were promised 50 per cent of future profits from the sales.
Meli and Harriton claimed to have an agreement with the producer of Hamilton to buy 35,000 tickets. The SEC claims no agreement ever existed and that no tickets were ever bought.
“Meli and Harriton raised millions from investors by promising big profits from reselling tickets to A-list events,” said SEC regional office director Paul Levenson. “In reality they were moving investor money in a circle and creating a mirage of profitability.”
The charges from the US attorney’s office include wire fraud, securities fraud and conspiracy.