Preet Bharara, the United States Attorney for the Southern District of New York, and Keith Milke, the Inspector-in-Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), announced today that JAMES TAGLIAFERRI, who managed and controlled TAG Virgin Islands, Inc. (“TAG”), an SEC-registered investment adviser, was arrested today for executing a scheme to defraud TAG clients.
Through TAG, TAGLIAFERRI received undisclosed payments in exchange for causing his clients to invest in certain securities; used client funds for improper purposes, including making payments to other clients who were demanding their funds; and caused false and fictitious securities instruments to be placed in client accounts. In total, TAGLIAFERRI received more than $3 million in undisclosed payments in connection with the fraud. He was arrested in St. Thomas, U.S. Virgin Islands, and is expected to be presented today in federal court in St. Thomas.