Long Beach Man Facing Up To 20 Years Jail Time For Role In $528M Fraud Scheme: Prosecutors

BROOKLYN, NY. — A Long Beach man is facing up to 20 years in jail after pleading guilty to his role in a $528 million wire fraud scheme, prosecutors said Tuesday.

In a Tuesday statement, the United States Attorney’s office said Long Beach resident Robert Cassino had pleaded guilty to wire fraud conspiracy on Feb. 18, while his co-defendants Raymond John Pirrello, Jr. and Joseph Passalaqua, both Sparta, NJ residents, pleaded guilty to charges of conspiracy to commit securities fraud, securities fraud and conspiracy to commit wire fraud Tuesday.

Cassino's attorney, Federal Defender James Darrow, did not respond to a Thursday morning request for comment.

“For years, the defendants brazenly lied to investors all over the country about the fees associated with their investments,” U.S. Attorney Joseph Nocella said. “The defendants diverted millions of dollars in undisclosed mark-up fees to pay themselves and their coconspirators. Our Office will vigorously prosecute those who lie to innocent investors and deprive them of their hard-earned money to benefit themselves.”

In a statement announcing the charges against Pirello, Passalaqua and Cassino, the Securities and Exchange Commission said that the men had raised over $528 million from a worldwide network over 4,000 investors using a network of unregistered sales agents to offer pre-IPO (Initial Public Offering) stock in companies that would soon go public.

The U.S. Attorney’s office said Tuesday that the men had lied to those investors, offering the stocks under the premise that there were no upfront fees on them, and that their company, Late Stage Management, LLC, would only make profits once these companies held their IPOs. Instead, the U.S. Attorney’s office said, Late Stage charged upfront fees as high as 150 percent, netting more than $88 million for them and their network of salespeople.

Cassino, the U.S. Attorney’s office said Tuesday, was involved in misrepresenting the existence and amount of fees when discussing them with investors.

For example, the U.S. Attorney’s office said, “they claimed that the only time Late Stage profited was on exit, when the company made its IPO or sold to a larger company, in which case it would be entitled to a 20% share of the investor’s profits. In reality, however, Late Stage charged fees in the form of upfront markups ranging from 10-100% of each investment. The upfront revenue generated by the inclusion of these markups was then used to pay the principals of Late Stage, including Pirrello, Passalaqua, Cassino and the employees of the sales offices."