One Sorry Ferrari
Online gaming CEO hustles car broker and scams investors with an IPO that never happened
Sandy John Masselli leased a Ferrari, a Mercedes and several other luxury cars from a New Jersey auto broker, and he got the broker to pay for them.
Masselli, CEO of Carlyle Entertainment, deftly flipped the sales script on the broker, claiming his online gaming company was about to do an initial public stock offering.
He offered the broker a chance to get in at the pre-IPO price. The broker wired $100,000 to Masselli’s bank account for 400,000 shares of Carlyle Entertainment stock, which Masselli said would be held in a trust until the IPO launched, according to a Securities and Exchange Commission complaint.
Masselli then used the broker’s money to lease several vehicles. But the IPO never happened.
Last week, Masselli, 63, of Columbia, S.C., received a six year prison sentence for securities fraud, bank fraud and wire fraud. He was ordered to pay restitution of $3.2 million, forfeit $1 million and serve three years of supervised release.
He is either one of the greatest negotiators to ever shop for luxury automobiles, or it’s true what they say about sales people – especially car sales people – that they are the easiest folks to scam.
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Hot cars, not so hot IPO
Shrewd car transactions were just a few examples of how well Masselli operated.
Masselli solicited at least $3 million in investments for an upcoming stock offering, but his company never even filed an application for an IPO, according to prosecutors.
Everybody wants to get in on an IPO before it hits the market, but average retail investors seldom get the chance.
The money Masselli collected for this non-existent IPO did not go to his company, but to personal expenses, including rent payments, restaurants, clothing, high-end hair products, cosmetics, Stub Hub tickets, a health spa, and ATM withdrawals.
“Sandy Masselli used a web of lies to dupe victims into investing millions of dollars in his company, promising them substantial returns from an initial public offering that was never going to happen,” said U.S. Attorney Philip Sellinger. “Instead of investing the money as promised, Masselli fraudulently spent it on himself and his family.”
It takes a broker
I probably shouldn’t take cheap shots at stockbrokers who become convicted felons, but doesn’t the defendant’s name, Sandy John, evoke mental images of a porta-potty at the beach?
Sandy John Masselli worked as a registered investment broker for 10 years until 1995.
This is going back a ways, but where else does one learn how to game aspiring IPO investors?
Masselli once held series 7 and 63 securities licenses. He’s listed as having held senior positions at Merrill Lynch, Pierce, Fenner & Smith; Drexel Burnham Lambert; Shearson Lehman Hutton; and Prudential Securities.
The company he set up, Carlyle Entertainment, is based in British Columbia but claims Charleston, S.C., as its principle place of business. The company purports to provide software-based games of chance offered over the internet.
It had been listed on the Canadian Securities Exchange from April 2016 through May 8, 2017, but the British Columbia Securities Commission suspended the listing for failing to file periodic disclosures and audited financial statements.
Masselli also created a web of corporate entities that he used for illicit banking transactions: Intercapital Partners, a Delaware corporation; Intercapital Management, a New Jersey corporation; and Appnostiq, a New Jersey corporation. He took out credit cards, maxed them out, and claimed the accounts had been opened fraudulently by identity thieves, prosecutors alleged.
He told investors their money would go toward improving Carlyle’s online platform and pay legal fees for the company’s upcoming IPO. But the money went to his lifestyle instead.
“Carlyle Gaming never took any meaningful steps toward conducting an IPO in the U.S. and lacked the financial resources to do so,” according to the SEC’s complaint.
Wheels of justice
Masselli committed his string of frauds between September 2011 through October 2017.
Masselli was first arrested for fraudulently obtaining credit and funds from credit card companies and brokerage firms in 2017. And charged again in 2018. Then in 2019, he was charged with securities fraud and identity theft.
His guilty plea came one year ago, in September 2023. Yet he was not sentenced until just last week.
Those wheels of justice sure left him plenty of time to enjoy that Ferrari.
Most people never get to drive a Ferrari, especially victims of financial fraud. It will be a nice memory for Masselli to revisit over his next six years in prison.
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"You get a Ferrari! And you get a Ferrari!" Oy. The nerve of this guy. The scams never end, do they.... PS - Love the title of your piece.