A South Carolina man, Sandy John Masselli, 63, of Columbia, was sentenced today to 72 months in federal prison for orchestrating multiple bank, wire fraud, and securities fraud schemes that spanned six years and resulted in millions of dollars in losses, announced U.S. Attorney Philip R. Sellinger.
Masselli had previously pleaded guilty before U.S. District Judge Michael A. Shipp to nine counts of a superseding indictment, which included charges of bank fraud, wire fraud, and securities fraud. The charges stemmed from his fraudulent activities between September 2011 and October 2017, during which he deceived investors into believing his online gaming company, Carlyle Entertainment Ltd., was on the verge of a lucrative initial public offering (IPO).
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“Sandy Masselli used a web of lies to dupe victims into investing millions of dollars in his company, promising them substantial returns from an initial public offering that was never going to happen. Instead of investing the money as promised, Masselli fraudulently spent it on himself and his family. The significant sentence handed down today holds him accountable for greedily profiting at the expense of innocent investors,” said U.S. Attorney Sellinger.
According to court documents and statements made in court, Masselli falsely promised investors that Carlyle would soon conduct an IPO on major exchanges like NASDAQ or the New York Stock Exchange (NYSE). He assured investors that they could purchase shares at discounted prices ahead of the IPO, which he claimed would occur within weeks or months. However, Masselli never filed the necessary applications or registration statements with the SEC to list Carlyle stock on these exchanges.
Instead of using the investment funds as promised—such as for improving Carlyle’s online platform or paying legal fees for the supposed IPO—Masselli misappropriated the money for personal use. He deposited the funds into various bank accounts he controlled, often opened under fictitious corporate names to conceal the origin of the money. He then quickly spent the misappropriated funds on personal and family expenses.
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In addition to his investment fraud, Masselli engaged in credit card fraud. He opened multiple credit card accounts, made extensive purchases, and then attempted to pay off the balances with funds from accounts that lacked sufficient money. These fraudulent payments temporarily allowed him to access additional credit before the payments were rejected, causing significant losses to the credit card companies. Masselli even falsely claimed that some of these accounts had been fraudulently opened by others using his stolen personal information.
Beyond the prison sentence, Judge Shipp also sentenced Masselli to three years of supervised release and ordered him to pay $3.2 million in restitution and $1 million in forfeiture.
The Securities and Exchange Commission (SEC) has previously filed a civil complaint against Masselli based on the securities fraud conduct.
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U.S. Attorney Sellinger credited the FBI, led by Special Agent in Charge James E. Dennehy in Newark, for their investigation leading to Masselli’s guilty plea. He also acknowledged the SEC Division of Enforcement, under the direction of Gurbir S. Grewal, for their role in the case.
The government was represented by Assistant U.S. Attorneys Eric A. Boden, Attorney-in-Charge of the Trenton Office, and Alexander E. Ramey of the U.S. Attorney’s Trenton Office.
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