NEWARK (CN) – New Jersey-based investor Robert J. Sucarato pocketed $494,000 in a Ponzi scheme, the SEC says in Federal Court. Sucarato, 40, whose “last known place of residence” was in New Brunswick, N.J., lied about his education and experience, falsified documents, including audits and business records, and claimed he was managing $7 billion when he actually had $110,000, the SEC says.
Sucarato blew his ill-gotten gains on sporting events, a BMW, cash, and spent some on his mom’s nursing home, the SEC says. He persuaded clients to “invest” $1.7 million in his New York Financial Company (NYFC) by falsely claiming it was registered with the SEC. He claimed he had graduated magna cum laude from New York University, but the institution has no record that he even enrolled, the SEC says.
He claimed NYFC’s vice president held “advanced degrees from an Ivy League academic institution” and another executive held a Masters of Business Administration degree, but the SEC says, “Sucarato used their names and created embellished biographies in order to create an illusion of stability, longevity and expertise.”
Sucarato invented a company history with purported “historical” rates of return, which he claimed ranged from 26.5 percent to 48.2 percent.
On his “sophisticated Web site, where he advertised NYFC’s investment advisory services,” Sucarato “claimed that he had over $7.2 billion under management and that over twenty experienced traders and additional support staff worked for the company,” the SEC said. “Neither of these statements are true.”
The Web site claimed the company had New York and Chicago branches, but they were “virtual” offices with “little more than prestigious sounding mailing addresses, telephone services, shared receptionists and shared conference rooms.”
Sucarato forged a “fictitious” audit report of NYFC “from a major accounting firm” claiming the company “had assets totaling $646,252,333 in 2004 and $800,170,760 in 2005.”
According to the SEC, the doctored company information and history persuaded two clients who met Sucarato at a yacht club in New Jersey during 2005, who invested $450,000 with the hedge fund operator.
They referred him to a friend in California, who invested $600,000, the SEC said.
All three referred Sucarato to a final investor, who contributed about $210,000, according to the complaint.
Sucarato then produced grossly inflated quarterly reports, which “falsely claimed the Strategic Fund had told assets of almost $5 billion” when his “personal brokerage accounts at this time was approximately $110,000.”
The SEC says he never invested the money, but “spent approximately $10,000 on sporting events, approximately $6,000 at an independent living facility for seniors in Boca Raton, Florida for his mother, thousands of dollars on a BMW automobile, and he withdrew approximately $78,000 in cash for his personal use.”
The little money Sucarato invest, he lost, the SEC says.
“Contrary to his claims to his clients, Sucarato consistently experienced net trading loses, which totaled approximately $850,000,” the Commission said.