A New Jersey unregistered investment advisor, who was charged in the past for violating securities regulations, has been charged, both civilly and criminally, with operating a $2.8 million Ponzi scheme.

Mark Marchi of Point Pleasant Beach, N.J., was the founder and owner of Precipio Capital. Between February 2016 and September 2020 he solicited $2.8 million from 22 investors by lying about the performance record of Precipio. He used new investments to pay earlier investors and also diverted funds to his personal accounts, according to a civil complaint filed by the SEC that charges him with fraud.

He also has been charged criminally with fraud by the U.S. Attorney for the District of New Jersey.

Without admitting or denying guilt, Marchi agreed to a settlement with the SEC that bars him from acting as an officer or director of any securities company and bars him from securities trading for anyone other than himself. The SEC complaint asks for disgorgement of the ill-gotten gains. The settlement leaves the amount to be paid up to the court.

In carrying out the fraud, the SEC complaint said, Marchi used about $451,000 of the more than $2.8 million he collected for trading. In addition, Marchi’s trading yielded a net loss of about $161,022, and $275,500 was ever transferred from Precipio’s brokerage accounts back to Precipio’s bank accounts for potential distribution to investors.

With the exception of four trades executed in 2019, Marchi’s trading in all Precipio brokerage accounts stopped in December 2018; but he falsified documents to make investors believe he was continuing profitable trading activity, the complaint said.

To hide the lack of profitable trading, to justify the continued collection of management fees, and to obtain new investments, Marchi falsified investment documentation and performance reports, the SEC said. In some instances, he put false information on the company’s website so that when investors looked at the performance record on the site it appeared he was continuing investing and making a profit, the SEC said.

He used new investment funds to pay a total of $1.4 million to early investors, according to the SEC. In addition, he diverted funds from Precipio’s bank accounts to his personal bank accounts, the complaint said.

Marchi is a recidivist who pleaded guilty in 1998 to felony charges of conspiracy to violate the federal securities laws, was barred by the New York Stock Exchange in 1999, and was subject to an Administrative Consent Order imposed by the New Jersey Bureau of Securities in 2015, the complaint said.