The Securities and Exchange Commission has obtained a preliminary injunction and won continuation of an asset freeze against two New York City men charged with creating a pyramid scheme involving tickets to top Broadway shows like “Hamilton” and A-list concerts by Adele and others.
The injunction bars Joseph Meli and Matthew Harriton from violating securities laws and continues an asset freeze against the two men and their four companies. Meli has also been charged criminally with fraud by the U.S. Attorney for the Southern District of New York. The injunction and asset freeze were announced by the SEC Monday. The order was issued April 26 in U.S. District Court in Manhattan.
The two men are accused of raising $97 million from 138 investors who thought they were putting their money into companies that resold high-value tickets, such as Metallica and Nine Inch Nails concerts; a concert festival known as Desert Trip that featured The Rolling Stones, Bob Dylan, Paul McCartney and other artists; and advance sales for the upcoming Broadway play “Harry Potter and the Cursed Child.” The defendants allegedly misrepresented to investors that their money would be pooled to buy large blocks of tickets to these events and others that would be resold at a profit to produce high returns for investors, the SEC complaint says.
Instead of investing the money, $59 million was allegedly used to make Ponzi payments to prior investors using money from new investors, and other money was used by Meli and Harriton for themselves, according to the SEC.
The court order also applies to companies the two controlled, including Advance Entertainment, Advance Entertainment II, 875 Holdings and 127 Holdings. The original complaint by the SEC was filed in January.