SEC Charges Five Brokers with Involvement in $102 Million Ponzi Scheme
Posted on Wednesday, July 18th, 2018 at 3:11 pm
In June 2018, the Securities and Exchange Commission (SEC) filed charges and obtained an asset freeze against Perry Santillo (no CRD available), Christopher Parris (CRD# 4552325), Paul LaRocco (CRD# 1829706), John Piccarreto (CRD# 6276418), and Thomas Brenner (CRD# 1489233) who were involved in a $102 million Ponzi scheme that bilked at least 637 investors throughout the U.S. through sales of securities in issuers they controlled, including First Nationle Solution LLC, United RL Capital Services, and Percipience Global Corp. Santillo, Parris, LaRocco, Piccarreto, Brenner, and the three issuers were charged with violating the antifraud provisions of the federal securities laws.
According to the complaint, investors were told that their funds would be used for the companies and some were guaranteed dividends or double-digit returns. However instead, Santillo, Parris, LaRocco, Piccarreto, Brenner “spent at least $20 million to enrich themselves and fund a jet-setting lifestyle, paid $38.5 million in Ponzi-like payments, and transferred much of the remainder in transactions that appear unrelated to the issuers’ purported businesses.
According to the SEC’s complaint, Santillo and Parris would buy or take over books of business of retiring investment professionals from around the country. Then, Santillo, Parris, LaRocco, Piccarreto, Brenner would persuade newly acquired clients to withdraw their money and invest in issuers controlled by Santillo, Parris, or their associates.
LaRocca was registered with Metlife Securities Inc. in Ocala, Florida from 2001 to 2010. In November 2011, LaRocco was barred by FINRA after he failed to request termination of his suspension within three months of the date of the notice of suspension. LaRocco has been the subject of three customer complaints between 2008 and 2010, one of which was denied, according to his CRD report.
Piccarreto was registered with First American Securities, Inc. in Orrville, Ohio from June 2014 to July 2015. In July 2017, FINRA suspended for 24 months and sanctioned him to $15,000 in civil and administrative penalties and fines after he consented to the sanctions and to the entry of findings that he “participated in private securities transactions, including some transactions by elderly customers, by way of an unregistered, private offering without providing any notification to his member firm, written or otherwise, regarding his participation in the unregistered, private offering. The findings stated that in exchange for Piccarreto’s work with the investors in the offering, he received a salary of $500 per week from a company he worked for while he was registered with his firm. The company was co-owned by an individual who was also 50 percent owner of the holding company of Piccarreto’s firm. Of 40 potential investors, approximately 20 actually invested in the offering, including some elderly customers. Each customer invested between $20,000 and $75,000.”
Brenner was registered with First American Securities, Inc. in Orrville, Ohio from 2011 to 2016. In July 2017, FINRA barred Brenner after he consented to the sanction and to the entry of findings that he refused to appear for FINRA requested on-the-record testimony regarding his involvement in the sale of three different private placements issued by persons or entities with which he had personal or business relationships. “The findings stated that FINRA recently received tips or complaints from numerous investors who invested in one or more of these private placements, and who were concerned about their inability to contact the issuers, and the issuers’ failure to liquidate or redeem their investments and return the funds to these investors. These investors were generally member of Brenner’s hometown community in Ohio, and many of them were seniors.”
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