According to the criminal complaint, Lattanzio misled his victims into believing their investments were safe and did not disclose his spending to them.
“Lattanzio masqueraded as a sophisticated hedge fund manager to capitalize on small businesses’ legitimate need for financing,” said Andrew Calamari, director of the SEC’s New York Regional Office. “He falsely reassured his investors they were earning profits while he was swiping their money to bankroll his affluent lifestyle that he otherwise could not afford.”
Furthermore, the SEC alleges that Black Diamond Capital Appreciation Fund never had more than approximately $5 million in assets, far less than the $800 million claimed.
Fishman alleged that the energy company eventually asked Lattanzio to withdraw their money, but to date has not received any of it back.
The wire and securities fraud counts each carry a maximum potential penalty of 20 years in prison and a fine of either $250,000 or twice the gain or loss from the offense. The criminal complaint also seeks forfeiture of the home Lattanzio purchased in Montclair, New Jersey, a 2013 BMW 650 and various pieces of jewelry.