LawFuel.com – Preet Bharara, the United States Attorney for the Southern District of New York, announced today that STEVEN STALTARE was sentenced in Manhattan federal court to 77 months in prison for defrauding investors in connection with two fraudulent investment schemes. STALTARE’s first scheme involved fraud in connection with the transfer of stock in Dematco, Inc. (“Dematco”). STALTARE’s second scheme involved defrauding investors in connection with investments in various stocks, including Dematco, Preventia, Inc. (“Preventia”), First Choice Healthcare Solutions, Inc. (“First Choice”), and Savtira Corporation (“Savtira”). STALTARE admitted to misleading investors in both schemes through numerous false statements and misrepresentations, as well as by misappropriating investment funds for his own personal use. STALTARE pled guilty on December 2, 2014, and was sentenced today by United States District Judge George B. Daniels.
Manhattan U.S. Attorney Preet Bharara said: “Steven Staltare offered investors bogus investment opportunities, knowing that it was a shell game in which he pocketed over $800,000 of investors’ money. Thanks to the efforts of the FBI and the Securities and Exchange Commission, Staltare will now begin to pay the price for his scheme to defraud innocent investors.”
According to the allegations contained in the Indictment, other documents filed in Manhattan federal court, and statements made during court proceedings:
First, from at least in or about 2011 through in or about 2012, STALTARE defrauded two investors (“Victim-1” and “Victim-2”) in connection with the transfer of shares of Dematco stock. In or about late 2011, STALTARE approached Victim-1 and asked Victim-1 to transfer hundreds of thousands of shares of Dematco stock that Victim-1 owned to a “partner” of STALTARE’s in exchange for $70,000 in cash. Victim-1 agreed to turn over his shares in Dematco in exchange for $70,000. At approximately the same time, STALTARE and another individual (“Partner-1”) approached Victim-2 and asked Victim-2 to loan them approximately $150,000 so that STALTARE could purchase shares of Dematco stock. STALTARE and Partner-1 promised Victim-2 that he would be paid $200,000 in three weeks and that Victim-2 would receive approximately one-third of the profits from the eventual sale of Dematco stock. Victim-2 was also promised that he would receive Dematco stock certificates as collateral for this loan. Based upon these representations, Victim-2 agreed to make this $150,000 loan to STALTARE and Partner-1. After Victim-2 made this loan, STALTARE provided Victim-2 with stock certificates that had been provided to STALTARE by Victim-1. Ultimately, STALTARE did not provide Victim-1 with the $70,000 that he had promised to pay in exchange for Victim-1’s shares of Dematco nor did STALTARE provide Victim-2 with any repayment for the $150,000 loan or any profits from any sale of Dematco stock. In reality, STALTARE transferred Victim-1’s shares in Dematco to Victim-2 without compensating Victim-1 and misappropriated the funds provided by Victim-2 for STALTARE’s own personal benefit.
Second, from at least in or about 2012 through in or about 2013, STALTARE defrauded two other investors (“Victim-3” and “Victim-4”) by misappropriating funds intended for investment in the stock of various companies. STALTARE agreed to invest approximately $25,000 for Victim-3 in Preventia stock, promising significant investment returns. STALTARE also agreed to invest approximately $357,000 for Victim-4 in various securities, including stock in Dematco, Preventia, First Choice and Savtira, again promising significant investment returns. However, once Victim-3 and Victim-4 provided STALTARE with the funds to invest in these stocks, rather than investing these funds in stocks on behalf of Victim-3 and Victim-4 as promised, STALTARE misappropriated these funds for his own personal benefit.
In the course of effectuating these fraudulent schemes, STALTARE defrauded victims in excess of $800,000.
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In addition to the prison sentence, STALTARE, 50, of Tampa, Florida, was sentenced to three years of supervised release, ordered to forfeit $846,250, and ordered to pay restitution of $846,250 to victims of his offenses.
Mr. Bharara praised the investigative work of the Federal Bureau of Investigation and thanked the Securities and Exchange Commission, for its assistance.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Brian R. Blais is in charge of the prosecution.