Monmouth County Man Indicted On Charges Of Securities Fraud,
Theft And Money Laundering For Stealing $690,000 From Investors
NJ Bureau of Securities Sues Defendant, His Company and Two Partners
TRENTON – Attorney General Anne Milgram, Criminal Justice Director Gregory A. Paw and Bureau of Securities Chief Vincent J. Oliva announced that a Millstone Township man was indicted today on charges he stole $690,000 from more than two dozen victims who invested millions of dollars in his fraudulent get-rich-quick scheme.
The New Jersey Bureau of Securities simultaneously filed a lawsuit in Superior Court in Monmouth County seeking restitution and penalties against the defendant, Michael D’Angelo, 46, of Millstone Township , his company, CMR Mngt. Group LLC, and two other owners of CMR. The Bureau has requested that the court freeze the assets of D’Angelo, his wife and CMR. The indictment and lawsuit stem from an investigation by the Bureau of Securities.
“ We charge that Mr. D ’ Angelo preyed ruthlessly on investors, taking their life savings in some cases and tricking others into re-mortgaging their homes to invest large sums in his fraudulent scheme, ” said Attorney General Milgram. “ He would show investors his luxury home, and promise to make them rich too. What he didn ’ t tell them is that he was living the good life by stealing their hard-earned money. ”
According to Director Paw, the Division of Criminal Justice obtained a state grand jury indictment today charging D’Angelo with first-degree money laundering, second-degree securities fraud and second-degree theft by failure to make required disposition of property received. It is charged that D’Angelo commingled investor funds, using funds from new investors to pay old investors in the typical fashion of a Ponzi scheme. He allegedly diverted large sums into his wife’s bank accounts to pay the couple’s personal expenses including, among other things, the mortgage payments for their lavish home and payments on high-end cars.
First-degree money laundering carries a maximum sentence of 20 years in prison and a $500,000 fine, while second-degree crimes carry a sentence of up to 10 years and a $150,000 fine. The indictment is merely an accusation and the defendant is presumed innocent until proven guilty.
“The Division of Criminal Justice is working closely with the Bureau of Securities to send a strong message to those who would defraud New Jersey investors: We’ll prosecute you and make you pay,” said Division of Criminal Justice Director Paw.
“The alleged actions of these defendants illustrate how unsuspecting investors can fall victim to fraud perpetrated by persons they knew beforehand,” said Bureau of Securities Chief Oliva. “The defendants solicited friends, neighbors and business acquaintances to invest in their scheme, knowing a level of trust had already been established. They exploited this trust for their own financial gain at the expense of investors.”
The civil complaint accuses D’Angelo, CMR and two other company owners, Richard Sladek, 43, of Plainsboro, and Charles T. Barbero, 43, of Sayreville, of violating the New Jersey Uniform Securities Law by, among other things, engaging in a scheme to defraud investors, acting as unregistered broker-dealers, and selling unregistered securities.
The complaint alleges that between January 2004 and January 2006, the defendants took approximately $3,260,000 from 26 investors, including at least 24 New Jersey residents. Approximately $2,570,000 has been returned to investors, including payments totaling $1,946,100 that were made to some of the investors after the defendants became aware that the Bureau of Securities was conducting an investigation. In return for the payments, the investors were required to sign fraudulent releases stating that the defendants had not engaged in fraud or sold the investors any securities.
D’Angelo is president of CMR. He and the other two owners originally held equal shares of CMR, but in August 2005, D’Angelo became 95 percent owner, leaving Sladek and Barbero with 2 ½ percent interests. D’Angelo managed the business, maintaining the books, soliciting investors, issuing checks to investors on behalf of CMR, and responding to investor inquiries. CMR initially had an office in Clark . It moved to Sayreville , and later to D’Angelo’s home.
According to the complaint, the defendants offered investments in the CMR “Capital Enhancement Program,” promising a guaranteed rate of return of 5 percent interest per month, or 60 percent annually, with return of the investor’s principal after 12 months. Investors were told their money was absolutely safe because it was held in “non-depletion funds” or “non-accessible” bank accounts. Investors were given conflicting stories about how the profits were generated, including foreign currency trading, unspecified activity involving Switzerland , U.S. federal government money manipulation, and trading in large blocks of bank notes.
Typically, investors received two or three 5 percent payments and were then approached about rolling over their investment into a second CMR program that promised a return of 15 percent interest per month, or 180 percent annually. This program made few, if any, payments to investors. A variety of excuses were made to investors for the lack of interest payments, including that their “guy in Switzerland” fell and broke his leg on the way to the bank, and that the package was accidentally sent to Swaziland instead of Switzerland.
Attorney General Milgram credited Investigator Richard Smullen, Investigator Isaac Reyes, Supervising Investigator Michael McElgunn, and Chief of Enforcement Richard Barry for conducting the investigation for the Bureau of Securities. She also credited State Investigator Noelle Holl of the Division of Criminal Justice for conducting a separate investigation for the Division of Criminal Justice. She thanked Deputy Attorney General and Assistant Section Chief Victoria Manning and Deputy Attorney General Christopher W. Gerold for filing the lawsuit for the Bureau.
Attorney General Milgram credited Deputy Attorney General Patrick Flor for presenting the case to the state grand jury for the Division of Criminal Justice – Major Crimes Unit.
The indictment was handed up to Superior Court Judge Maria Marinari Sypek in Mercer County , who assigned the case to Monmouth County , where D’Angelo will be ordered to appear at a later date to answer the charges.
Copies of the indictment and the civil complaint are available with this press release on the Attorney General’s Web site at www.njpublicsafety.com.
Oliva noted that anyone offering to sell securities in the state must be registered with the New Jersey Bureau of Securities, and in many instances, the security itself must also be registered before it can be offered to investors.
“Always check with the Bureau to verify that the security and the person offering it are registered with us, even if the seller is a friend or the investment is recommended by someone you know,” Chief Oliva said.
The Bureau of Securities can be contacted toll-free within New Jersey at 1-877-I-INVEST (1-877-446-8378) or from outside New Jersey at 973-504-3600 . The Bureau’s web site is located at www.njsecurities.gov.