Long Island Man Pleads Guilty to Investment Fraud Scheme
A Long Island man has pleaded guilty to conspiracy charges stemming from an investment fraud scheme that left at least 12 investors with significant financial losses.
Brian Ferraioli, 41, of Sayville, N.Y., pleaded guilty today before U.S. District Judge Jeffrey A. Meyer in New Haven to one count of conspiracy to commit mail and wire fraud. The offense carries a maximum term of imprisonment of 20 years.
According to court documents and statements made in court, Ferraioli and his co-conspirator Thomas Heaphy, Jr. solicited prospective investors to purchase shares of Waters Club Worldwide, Inc. and Waters Club Holdings, Inc. (collectively, “Waters Club”), which provided yacht charter services to customers.
From approximately August 2016 to February 2017, Ferraioli and Heaphy recruited at least 12 investors to pay a total of at least $1,289,500 for shares of Waters Club stock. One of the victims of the Waters Club scheme was a Connecticut resident who paid $475,000 to Waters Club.
Ferraioli’s total gain from this scheme was $297,546, and Heaphy’s total gain was $307,658. Ferraioli and Heaphy began to sell Waters Club securities after they learned that they were under federal investigation for an unrelated stock “pump and dump” scheme in the summer of 2016.
At least six Waters Club victim-investors have also been identified as victims of the earlier stock pump and dump scheme. Heaphy, 43, of East Moriches, N.Y., previously pleaded guilty to charges stemming from both the stock pump and dump scheme and the Water’s Club investment fraud scheme.
Ferraioli is currently released on bond pending sentencing. Sentencing dates have not been scheduled. This investigation is being conducted by the Federal Bureau of Investigation and the Internal Revenue Service – Criminal Investigation Division. The case is being prosecuted by Assistant U.S. Attorney Avi M. Perry.
Key Facts
- State: Connecticut
- Category: White Collar Crime
- Source: DOJ Press Release â†â€â€
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