SEC: Ponzi scheme extended to more concerts, shows

Metallica, Bob Dylan, Harry Potter, others allegedly tied to plot

An alleged Ponzi scheme that offered bulk purchase and resale of tickets to the Broadway blockbuster Hamilton and concerts by singer Adele lured investors with similar offers for a Harry Potter play and other high- demand shows, federal investigators charged Tuesday.

Investors also got sales pitches for last fall’s Desert Trip concert that featured Bob Dylan, Paul McCartney and The Rolling Stones, the Securities and Exchange Commission alleged in an amended court complaint.

The promised ticket- resale offerings allegedly also included the upcoming Broadway play Harry Potter and the Cursed Child, plus concerts by rock bands Metallica and Nine Inch Nails.

Expanding the alleged scheme’s scope, the SEC complaint said the scheme raised more than $ 97 million from at least 138 investors in 17 states. The original court filing in January charged the scam took in more than $ 81 million from at least 125 investors.

New York City businessmen Joseph Meli and Matthew Harriton and businesses they controlled are charged with fraud for allegedly telling investors their money would be pooled to buy large blocks of tickets that would then be resold for high profits. They allegedly told investors deals were in place to buy 35,000 tickets to Hamilton, which has been sold out for months in advance, and 250,000 seats for the Harry Potter play, which is scheduled to open on Broadway next year.

All of the investor offerings were bogus, federal investigators allege.

The defendants, who have denied any wrongdoing, are accused of diverting at least $ 74 million in investor funds to keep the Ponzi scheme running and enrich themselves, family members and others with payments for jewelry, tuition for private schools and camps, casino trips and other expenses.

The amended court complaint also expanded the number of relief defendants who allegedly received investor funds from the scheme. The relief defendants, including Meli’s mother and wife, collectively received more than $ 2.5 million of investor funds.

The SEC also charged that investor money was used to purchase an East Hampton, N. Y., home for $ 3 million in cash in the name of Meli’s wife.

Separately, Meli and another man, Steven Simmons, were indicted on criminal charges last month for allegedly using a Ponzi- like scam to defraud investors of Sentinel Growth Fund Management, a hedge fund with offices in New York City and Connecticut. They have denied any wrongdoing in that case.

The SEC last month filed a civil court complaint that accused Sentinel and its CEO, Mark Varacchi, of misappropriating at least $ 3.95 million of investor assets.