Earlier today, a superseding indictment was unsealed in the federal court in Brooklyn. Robert Cassino, also known as "Bobby Cassino," Joseph Passalaqua, and Joseph Rivera have been charged with securities fraud conspiracy, wire fraud conspiracy, and securities fraud. The defendants were arrested and are being arraigned before United States Magistrate Judge James R. Cho. Raymond John Pirrello, Jr., also known as "Ray John," had previously been indicted for his role in the scheme.
The charges were announced by John J. Durham, United States Attorney for the Eastern District of New York, and James E. Dennehy, Assistant Director in Charge of the FBI's New York Field Office.
"The defendants repeatedly lied to investors about the costs associated with their investments and diverted millions of dollars in undisclosed mark-up fees to their sales offices," stated United States Attorney Durham. He further emphasized that his office will vigorously prosecute those who exploit individual investors for personal gain.
Durham expressed appreciation for the Securities and Exchange Commission's (SEC) cooperation during the investigation.
James E. Dennehy added that "at the behest of the company’s leadership, three defendants allegedly enticed investors with material misinformation to steal millions of their dollars through undisclosed upfront fees." He stressed that such financial practices would not be tolerated by the FBI.
According to details from the indictment, Pirrello, Cassino, Passalaqua, and Rivera were involved in defrauding investors through Late Stage Management LLC (Late Stage), a New Jersey-based manager of investment funds offering "no fee" opportunities in pre-IPO stocks. Late Stage collaborated with several sales offices across New Jersey, New York, and Florida to promote these investments.
Pirrello partnered with Late Stage's leadership while Cassino, Passalaqua, and Rivera managed operations at Pre IPO Marketing Inc., Prior2IPO, and B4IPO respectively. They communicated on how to market Late Stage to investors while making false representations about fees paid by investors. Contrary to claims that profits were only taken upon an IPO or sale to a larger company at 20% share of investor profits; Late Stage charged upfront markups between 10-50%. From March 2019 to July 2022 approximately $528 million was raised from investors with $88.6 million diverted as undisclosed markups.
Charges remain allegations until proven guilty; all defendants are presumed innocent unless proven otherwise.
Individuals who believe they may have been victimized are urged to contact the FBI via www.fbi.gov/Pirrello or call 1-800-CALL-FBI.
The case is being prosecuted by Assistant United States Attorney Jessica K. Weigel with assistance from Special Agent Martin Sullivan and Paralegal Specialist Sarah Burn from the Business and Securities Fraud Section.
Defendants include:
- Robert Cassino ("Bobby Cassino"), age 62 from Long Beach, New York
- Joseph Passalaqua, age 36 from Sparta, New Jersey
- Joseph Rivera, age 45 from Elmont New York
Previously indicted:
- Raymond John Pirrello Jr ("Ray John"), age 48 from Sparta New Jersey