SEC v. JOSEPH CIMINO, No. 7:21-cv-01375, Southern District of New York (Feb. 17, 2021) — Complaint

RICHARD R. BEST
REGIONAL DIRECTOR
Lara  Shalov  M e hraban
We ndy  B . Te ppe rman
Richard  Hong
Eric C. Kirs ch
Attorne ys  for Plaintiff
SECURITIES AND EXCHANGE COMMISSION
New York Regional O ffic e
B rookfie ld Place
200 Vesey Street, Suite 400
New York, New York 10281-1022
(212) 336-0956 (Hong)
[email protected]

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

SECURITIES AND EXCHANGE
COMMISSION,

                                             Plaintiff,

                        -agains t-

JOSEPH CIMINO,

                                             De fe ndant.

COMPLAINT

21 Civ. _____ (       )

JURY TRIAL DEMANDED

P laintiff  Securities  and Exchange C ommis s ion  (“Commission”),   for  its  Complaint   against
Defendant Joseph  Cimino  (“C imino”), a lle ge s   a s  f ollow s :
SUMMARY
1. This   case involves  fraud  perpetrated  by  Cimino   in  connection   with  sales  of
securities  issued  by 6  Degree Tequila,  LLC (“Six  Degree”), a private  company  Cimino  founded
purportedly   creating  and  distributing   its  own  brand  of  tequila.    Cimino  knowingly  or recklessly
made  material  misrepresentations   to  investors  in  Six  Degree  and  misappropriated   funds  raised
from those investors.

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2. Between December 2014  and  September  2017,  Cimino  personally  solicited
investors  for  Six  Degree  and raised  approximately   $985,000   from  approximately  24 investors,
most  of  whom  were  located  in  New  York  or  New  Jersey.
3. Cimino  presented  Six  Degree as a start-up  company  that had already successfully
raised  funds  from  a  number  of  investors.  An investor  list  that Cimino  maintained  and gave to
investors  contained  false investor  names and dollar  amounts,  creating the appearance that Six
Degree had raised more money than it actually  had.  Cimino  also provided  false financial
information  to Six  Degree’s largest investor  prior  to soliciting  a second round  of investment  from
him.
4. As  he  raised  funds  from  investors,   Cimino  instead  misappropriated most of those
funds for personal purposes,  such as purchases at grocery stores, department stores, fast food
restaurants,  and  home  improvement   stores.
VIOLATIONS
5. By virtue  of the foregoing  conduct  and as alleged  further herein, C imino  has
viola te d  Section  17(a) of the Securities Act of 1933  (“Securities  Act”) [15 U.S.C. § 77q(a)],
Section  10(b)  of  the  Securities  Exchange  Act  of  1934  (“Exchange  Act”)  [15  U.S.C.  §§ 78j(b)],
and Rule  10b-5 thereunder  [17  C.F.R.  § 240.10b-5].
6. Unless C imino  is  restrained and enjoined,  he will  engage in the acts, practices,
transactions,  and  courses  of  business  set  forth  in  this  Complaint   or  in  acts,  practices,  transactions,
and courses of business  of similar  type and object.
NATURE OF THE PROCEEDINGS AND RELIEF SOUGHT
7. The  Commission   brings  this  action  pursuant  to  the  authority   conferred  upon  it  by
Securities  Act Sections   20(b) and  20(d)  [15  U.S.C. §§   77t(b)  and 77t(d)]  and Exchange  Act

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Section  21(d)  [15 U.S.C. §   78u(d)].
8. The Commission   seeks a final  judgment: (a) permanently  enjoining C imino  from
violating  the federal securities laws and rules this  Complaint  alleges he has viola te d;  (b)  ordering
C imino  to disgorge a ll ill-gotten   gains  he received as a result of the violations  alleged  here and to
pay prejudgment  interest  thereon pursuant  to  15  U.S.C.  § 78u(d)(5)  and  Sections  6501(a)(1)  and
(a)(3) of the National  Defense Authorization  Act for Fiscal  Year 2021,  P ub. L. No. 116-283,  to
be codified  at 15  U.S.C. §§ 78u(d)(3)  and  78u(d)(7);  (c) ordering C imino  to pay civil  money
penalties  pursuant  to  Securities  Act  Section  20(d)  [15  U.S.C. § 77t(d)]  and Exchange  Act Section
21(d)(3) [15 U.S.C. § 78u(d)(3)];  and  (d) ordering any other and further relief the Court may
deem just  and proper.
JURISDICTION AND VENUE
9. This  Court  has jurisdiction   over  this  action pursuant  to Securities  Act Section
22(a) [15 U.S.C. § 77v(a)] and Exchange  Act Section  27  [15 U.S.C. § 78aa].
10. C imino,  directly  and indirectly,  has   made use of the means or instrumentalit ies  of
interstate commerce or of the mails  in  connection   with  the  transactions,  acts,  practices,  and
courses of business  alleged  herein.
11. Venue lie s   in  this   D is tr ic t  unde r   Se c ur itie s   A c t  Section  22(a) [15  U.S.C. § 77v(a)]
and Exchange  Act  Section  27  [15  U.S.C. § 78aa].  C imino  may be found  in,  is an inhabitant  of,
or transacts  business  in the Southern District  of New York,  and certain of the acts, practices,
transactions,  and  courses  of  business  alleged  in  this  Complaint   occurred  within   this  District.
Cimino  operated Six  Degree out of his home in  Orange  County,  New  York  and misappropriated
proceeds of investments  in this  District.

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DEFENDANT
12. Cimino, age 56,  is a resident of Warwick, NY.  He incorporated  Six  Degree on
June  30,  2014  and  served  as  its  sole  Managing  Member  until   January  2018.
OTHER RELEVANT ENTITY
13. Six Degree was a New York limited  liabilit y  corporation  with  its principal   place
of business  in Warwick,  New York.  Six  Degree distributed  its own brand of tequila,  which was
manufactured  for  Six  Degree  by  a  distiller   in  Mexico.    In  addition  to Cimino  as Managing
Member, Six  Degree had one employee,  whose job  was to find  new distributors  for Six  Degree.
FACTS
I. Cimino Offe re d and  Sold Inte re s ts in Six De gre e to Investors .
14. Cimino  solicited  investors  to purchase membership  interests in Six  Degree
between December 2014  and September 2017, r a is ing  approximately  $985,000   in  total.    Cimino
personally  solicited  each of the investors.    On at least several of those occasions, Cimino
incorporated  a  tequila  tasting  into  his  sales  pitch.
15. C imino  provided  prospective  investors  with an Operating  Agreement and a
Membership  Agreement.
16. The Six  Degree  Operating  Agreement  appointed  Cimino  as sole  Managing
Member  and  granted  him  a  51%  initial   membership   interest  in  exchange  for  cash  and  services  in
kind.    Under the Operating  Agreement, Cimino  was not entitled  to a salary or any other form of
compensation  for his  work without  the consent of a majority  of the interests of investors.
Moreover,  Cimino  could  only  obtain  reimbursement  of certain expenses of Six Degree incurred
in     the management  of Six  Degree’s business.
17. To purchase Six  Degree shares, investors  signed the Operating  Agreement and the

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Membership   Agreement,  which  gave  them  a  percentage  ownership  interest  based  on  the  amount
they  invested  and  a  pro  rata entitlement  to  profits  and losses.
18. The Operating  Agreement required  each investor to  represent  and  warrant  that  the
investor  was acquiring  its interest in  the company  for the investor’s  own account as an
investment  and  without  an  intent  to  distribute  the interest.  It also provided  that as Managing
Member, Cimino  had the sole authority  to manage Six  Degree, and investors  had no management
rights.
II. Cimino Knowingly  or Re cklessly Mis represented and Omitte d Mate rial Facts
19. Cimino  created and maintained lists  of  Six  Degree’s  investors.  However, in  at
least two instances,  Cimino  provided purported  investor  lis ts   that included false entries to
potential   investors  to  induce  them  to  invest  in  Six  Degree.    Cimino   falsely  included   names  and
investment  amounts  for individua ls  who were his  friends and family  members,  but who had
never invested  in Six  Degree.  Cimino  obtained  a $37,500  from one such investor  in  March
2016,  and he obtained  $75,000  from the other investor  in  August 2017.
20. C imino  also created a 40-page  booklet   providing sales and expense forecasts and
describing Six  Degree’s  product  and  business  plan.    The  booklet  falsely  reported,  for  2015,  sales
of approximately  $260,000  and a net profit  of approximately  $40,000.   As Six  Degree did  not
launch  its  operations  until  the spring  of 2016,  these numbers were entirely  fictitious.   Cimino
provided   this  booklet   to  at  least  one  investor  who  invested  $37,500   in  Six  Degree  in  March  2016.
21. Cimino  later prepared and distributed  to investors  financial  statements that
contained  false information,  including  reports of sales that had not occurred.  For example,  on
July  18,  2017,  Cimino   distributed  to  investors  a  quarterly  update  that  falsely  reported  year-to-
date sales in Puerto Rico—one  of the few jurisdict ions  where Six  Degree was sold—of   891  cases
of  tequila.     In  reality,  Six  Degree  had  sold  fewer  than  200  cases  in  P uerto  Rico.    The  report

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attached a profit  and loss statement that was based on false, inflated  sales totals,  including  the
false Puerto Rico sales.  One of the  investors  who  received  this  statement  considered it   in  making
an  additional   investment  of  $75,000   on  August  9,  2017.
22. As  the  sole  person  with  the  power  to  manage  Six  Degree  and  the  sole  person
(aside  from  the  one  employee  who  found  new  distributors   for Six  Degree)  engaged  in  operating
Six  Degree, Cimino  knew or recklessly  disregarded  that each of these statements were false.  By
making  these  statements  to  potential  investors,  Cimino  knowingly or  recklessly  engaged  in
deceptive  conduct  designed   to  mislead  them.
III. Cimino M is appropriate d Inve s tor Funds
23. Although  the Operating  Agreement provided  that any compensation  to the
Managing  Member would  require  the consent of a majority  of the interests of investors,  and
although  it  restricted the expenses for which  Cimino  could  reimburse  himself,   Cimino
continually  misappropriated funds  raised  from  investors  for  personal  purposes—often  within
days  of  it  being  deposited  in  Six  Degree’s  accounts.
24. C imino’ s  first sale of Six  Degree  membership  interests,  raising  $50,000  from  an
individua l, was deposited  in  Six  Degree’s bank  account on  December  4,  2014.    Four  days  later,
on  December  8,  Cimino   transferred approximately   $12,412   to  his  personal checking  account,
$552  to  pay  his  car  loan,  and  $99  to  a  restaurant.    The  next  day,  on  December  9,  Cimino
transferred from  Six  Degree’s  bank  account  another $4,000  to his personal  account.  C imino
used the funds to pay his personal  expenses.  Seven  days after Six  Degree received the proceeds
in  its   bank  account  of  its next sale of membership  interests on December 24,  2014,  Cimino  made
another  payment  from  Six  Degree’s  bank  account  to his  car loan.
25. This  pattern  repeated  itself  throughout   the  time  that  Cimino   was  selling
membership   interests  in  Six  Degree.  When Cimino  began ramping  up his selling  efforts in

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March 2016,  he again  transferred significant  sums to his  personal account.  For example, Six
Degree obtained  an investment  of $150,000 in  its bank account on  April  20,  2016, and one  week
later,  Cimino  transferred $24,687 from  Six  Degree’s  bank  account to  his  checking  account.
26. Between December 2014  and  January 2018,  Cimino  used a majority  of the funds
raised  from  investors  for  unauthorized   personal  purposes.    He transferred a total  of over
$470,000  from  Six  Degree’s bank account dir e c tly  to  his  personal  checking  account.  These
funds  constituted   substantially   all  of  the  funds  deposited   in  Cimino’s   personal  checking  account
during   this  period,   and  Cimino   used  the  funds  to  pay  his  living  expenses, such as purchases at
grocery  stores,  department  stores,  fast  food  restaurants,  and  home  improvement   stores.
27. Cimino   also  spent  dir e c tly  from  Six  Degree’s  bank  account  more  than  $28,000 on
his  cars,  including   payments  on  car  loans;  $58,000  in  payments to several credit cards; and
$7,600   in  ATM  withdrawals.  By the time  Cimino  was removed  as Managing  Member, only
$1,800 remained  in  Six  Degree’s  account.  Immediately  after Cimino  was removed,  he accessed
those funds to make an auto loan payment,  a transfer to his account,  and  a  hotel  bill   payment.
28. Throughout   the  time  period,   Cimino   provided   prospective  investors  with  the
Operating  Agreement, which represented that any payment of compensation  to Cimino  would
require  the  consent of a majority  of the interests  of  investors.    Cimino   did  not  disclose  to
investors  his prior  misappropriat ion  or that he intended  use a substantial  portion  of the money he
raised to fund his living  expenses without  the consent of the majority  of investors.  In doing  so,
C imino  knowingly or recklessly  engaged  in  deceptive  conduct  designed  to  mislead  and  steal
from Six  Degree investors.
29. Six  Degree’s investors  lacked the power to remove him  unless he violated  a
standard of care that prohibited  grossly  negligent  or reckless conduct,  intentional  misconduct,

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fraud, or a knowing  violation  of law.  In January 2018,  after an investor  learned of Six  Degree’s
true financial  condition  and called  a meeting  of members,  Six  Degree’s members removed
Cimino  as Six  Degree’s Managing  Member.
FIRST CLAIM FOR RELIEF
Violations  of Se curitie s  Act Se ction 17(a)

30. The Commission  re-alleges and incorporates  by  reference here the a lle ga tions    in
paragraphs 1 through 29.
31. C imino,   directly  or  indirectly,   singly   or  in  concert,  in  the  offer  or  sale  of  securities
and by the use of the means or instruments  of transportation  or communication  in interstate
commerce or the mails,  (1) knowingly  or recklessly  has employed  one or more devices, schemes,
or artifices   to  defraud,  (2)  knowingly,  recklessly,  or  negligently   has obtained  money  or  property
by means of one or more untrue statements of a material  fact or omissions  of a material  fact
necessary  in  order  to  make  the  statements  made,  in  light   of  the  circumstances  under  which  they
were  made,  not  misleading,  and/or (3) knowingly,  recklessly,  or negligently  has engaged  in  one
or more  transactions,  practices, or courses   of business  which  operated  or  would  operate  as a
fraud or deceit upon  the purchaser.
32. By reason of the foregoing, C imino,   directly  or  indirectly,   singly  or  in  concert,
has   violated   and,  unless  enjoined,   will   again  violate  Securities  Act  Section  17(a)  [15  U.S.C.
§   77q(a)].
SECOND CLAIM FOR RELIEF
Violations  of Exchange  Act Se ction 10(b) and Rule  10b-5 The re unde r

33. The Commission  re-alleges  and incorporates  by  reference here the allegations  in
paragraphs 1 through 29.
34. C imino,   directly  or  indirectly,   singly   or  in  concert,  in  connection   with  the

 9
purchase or sale of securities and by the use of means or instrumentalit ies  of interstate
commerce, or the mails,  or the facilities  of a national  securities exchange, knowingly  or
recklessly  has  (i)  employed   one  or  more  devices, schemes, or artifices   to defraud, (ii)  made one
or more untrue statements of a material fact or omitted  to state one or more material  facts
necessary  in  order  to  make  the  statements  made,  in  light   of  the  circumstances under which  they
were  made,  not  misleading,  and/or (iii)  engaged in  one or more  acts, practices, or courses  of
business  which  operated  or  would  operate  as  a  fraud  or  deceit  upon  other  persons.
35. By reason of the foregoing, C imino,   directly  or  indirectly,  singly  or in  concert,
has   violated   and,  unless  enjoined,   will   again  violate  Exchange  Act  Section  10(b)  [15  U.S.C.
§   78j(b)]  and Rule 10b-5  thereunder  [17  C.F.R.  § 240.10b-5].
PRAYER FOR RELIEF
 WHEREFORE, the Commission  respectfully  requests that the Court enter a Final
Judgment:
I.
P ermanently  enjoining  C imino  and his  agents,  servants,  employees,   and attorneys and all
persons  in  active  concert  or  participation   with  any  of  them  from  violating,   dir e c tly  or   indir e c tly,
Securities  Act Section  17(a) [15  U.S.C. § 77q(a)],  Exchange  Act  Section  10(b)  [15  U.S.C.
§   78j(b)],   and  Rule  10b-5  thereunder [17 C.F.R. § 240.10b-5];
II.
Ordering C imino  to disgorge a ll  ill-gotten   gains   he  received  directly  or  indirec tly,  as a
result of the alleged  violations,   w ith  pre-judgment   interest  thereon,  pursuant  to  15  U.S.C.
§   78u(d)(5)  and Sections 6501(a)(1)  and (a)(3) of the National  Defense Authorization  Act for
Fiscal  Year 2021,  P ub. L. No. 116-283,  to be codified  at 15 U.S.C. §§ 78u(d)(3)  and 78u(d)(7);

 10
III.
Ordering C imino  to pay civil  monetary penalties under Securities Act Section  20(d)
[15 U.S.C. § 77t(d)]  and  Exchange  Act Section  21(d)(3) [15 U.S.C. § 78u(d)(3)];  and
IV.
Granting   any  other  and  further  relief  this  Court  may  deem  just  and  proper.

Dated:  New York,  New York
February  17,  2021
Respectfully  submitted,

/s/ Richard R. Best
RICHARD R. BEST
REGIONAL DIRECTOR
Lara Shalov  Mehraban
Wendy B. Tepperman
Richard  Hong
Eric  C. Kirsch
Attorneys f or   P la intif f
SECURITIES AND EXCHANGE COMMISSION
New York  Regional  Office
Brookfield  P lace
200  Vesey  Street,  Suite  400
New York,  New York  10281-1022
(212)  336-0956  (Hong)
[email protected]

RICHARD R. BEST  
REGIONAL DIRECTOR 
Lara Shalov Mehraban 
Wendy B. Tepperman 
Richard Hong 
Eric C. Kirsch 
Attorneys for Plaintiff 
SECURITIES AND EXCHANGE COMMISSION 
New York Regional Office 
Brookfield Place  
200 Vesey Street, Suite 400 
New York, New York 10281-1022 
(212) 336-0956 (Hong) 
[email protected]  
 
UNITED STATES DISTRICT COURT 
SOUTHERN DISTRICT OF NEW YORK 
 
SECURITIES AND EXCHANGE 
COMMISSION, 
 
                                             Plaintiff, 
 
                        -against- 
 
JOSEPH CIMINO,    
  
                                             Defendant. 
 
 

 
 
COMPLAINT 

   
21 Civ. _____ (       ) 

 
   

JURY TRIAL DEMANDED 
  

           
          

 
Plaintiff Securities and Exchange Commission (“Commission”), for its Complaint against 

Defendant Joseph Cimino (“Cimino”), alleges as follows: 

SUMMARY 

1. This case involves fraud perpetrated by Cimino in connection with sales of 

securities issued by 6 Degree Tequila, LLC (“Six Degree”), a private company Cimino founded 

purportedly creating and distributing its own brand of tequila.  Cimino knowingly or recklessly 

made material misrepresentations to investors in Six Degree and misappropriated funds raised 

from those investors.  

Case 7:21-cv-01375   Document 1   Filed 02/17/21   Page 1 of 10



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2. Between December 2014 and September 2017, Cimino personally solicited 

investors for Six Degree and raised approximately $985,000 from approximately 24 investors, 

most of whom were located in New York or New Jersey.   

3. Cimino presented Six Degree as a start-up company that had already successfully 

raised funds from a number of investors.  An investor list that Cimino maintained and gave to 

investors contained false investor names and dollar amounts, creating the appearance that Six 

Degree had raised more money than it actually had.  Cimino also provided false financial 

information to Six Degree’s largest investor prior to soliciting a second round of investment from 

him.   

4. As he raised funds from investors, Cimino instead misappropriated most of those 

funds for personal purposes, such as purchases at grocery stores, department stores, fast food 

restaurants, and home improvement stores. 

VIOLATIONS 

5. By virtue of the foregoing conduct and as alleged further herein, Cimino has 

violated Section 17(a) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. § 77q(a)], 

Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. §§ 78j(b)], 

and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]. 

6. Unless Cimino is restrained and enjoined, he will engage in the acts, practices, 

transactions, and courses of business set forth in this Complaint or in acts, practices, transactions, 

and courses of business of similar type and object.   

NATURE OF THE PROCEEDINGS AND RELIEF SOUGHT 

7. The Commission brings this action pursuant to the authority conferred upon it by 

Securities Act Sections 20(b) and 20(d) [15 U.S.C. §§ 77t(b) and 77t(d)] and Exchange Act 

Case 7:21-cv-01375   Document 1   Filed 02/17/21   Page 2 of 10



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Section 21(d) [15 U.S.C. § 78u(d)].  

8. The Commission seeks a final judgment: (a) permanently enjoining Cimino from 

violating the federal securities laws and rules this Complaint alleges he has violated; (b) ordering 

Cimino to disgorge all ill-gotten gains he received as a result of the violations alleged here and to 

pay prejudgment interest thereon pursuant to 15 U.S.C. § 78u(d)(5) and Sections 6501(a)(1) and 

(a)(3) of the National Defense Authorization Act for Fiscal Year 2021, Pub. L. No. 116-283, to 

be codified at 15 U.S.C. §§ 78u(d)(3) and 78u(d)(7); (c) ordering Cimino to pay civil money 

penalties pursuant to Securities Act Section 20(d) [15 U.S.C. § 77t(d)] and Exchange Act Section 

21(d)(3) [15 U.S.C. § 78u(d)(3)]; and (d) ordering any other and further relief the Court may 

deem just and proper. 

JURISDICTION AND VENUE 

9. This Court has jurisdiction over this action pursuant to Securities Act Section 

22(a) [15 U.S.C. § 77v(a)] and Exchange Act Section 27 [15 U.S.C. § 78aa].  

10. Cimino, directly and indirectly, has made use of the means or instrumentalities of 

interstate commerce or of the mails in connection with the transactions, acts, practices, and 

courses of business alleged herein. 

11. Venue lies in this District under Securities Act Section 22(a) [15 U.S.C. § 77v(a)] 

and Exchange Act Section 27 [15 U.S.C. § 78aa].  Cimino may be found in, is an inhabitant of, 

or transacts business in the Southern District of New York, and certain of the acts, practices, 

transactions, and courses of business alleged in this Complaint occurred within this District.  

Cimino operated Six Degree out of his home in Orange County, New York and misappropriated 

proceeds of investments in this District. 

Case 7:21-cv-01375   Document 1   Filed 02/17/21   Page 3 of 10



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DEFENDANT 

12. Cimino, age 56, is a resident of Warwick, NY.  He incorporated Six Degree on 

June 30, 2014 and served as its sole Managing Member until January 2018. 

OTHER RELEVANT ENTITY 

13. Six Degree was a New York limited liability corporation with its principal place 

of business in Warwick, New York.  Six Degree distributed its own brand of tequila, which was 

manufactured for Six Degree by a distiller in Mexico.  In addition to Cimino as Managing 

Member, Six Degree had one employee, whose job was to find new distributors for Six Degree.  

FACTS 

I. Cimino Offered and Sold Interests in Six Degree to Investors. 

14. Cimino solicited investors to purchase membership interests in Six Degree 

between December 2014 and September 2017, raising approximately $985,000 in total.  Cimino 

personally solicited each of the investors.  On at least several of those occasions, Cimino 

incorporated a tequila tasting into his sales pitch. 

15. Cimino provided prospective investors with an Operating Agreement and a 

Membership Agreement. 

16. The Six Degree Operating Agreement appointed Cimino as sole Managing 

Member and granted him a 51% initial membership interest in exchange for cash and services in 

kind.  Under the Operating Agreement, Cimino was not entitled to a salary or any other form of 

compensation for his work without the consent of a majority of the interests of investors.  

Moreover, Cimino could only obtain reimbursement of certain expenses of Six Degree incurred 

in the management of Six Degree’s business. 

17. To purchase Six Degree shares, investors signed the Operating Agreement and the 

Case 7:21-cv-01375   Document 1   Filed 02/17/21   Page 4 of 10



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Membership Agreement, which gave them a percentage ownership interest based on the amount 

they invested and a pro rata entitlement to profits and losses.   

18. The Operating Agreement required each investor to represent and warrant that the 

investor was acquiring its interest in the company for the investor’s own account as an 

investment and without an intent to distribute the interest.  It also provided that as Managing 

Member, Cimino had the sole authority to manage Six Degree, and investors had no management 

rights. 

II. Cimino Knowingly or Recklessly Misrepresented and Omitted Material Facts 

19. Cimino created and maintained lists of Six Degree’s investors.  However, in at 

least two instances, Cimino provided purported investor lists that included false entries to 

potential investors to induce them to invest in Six Degree.  Cimino falsely included names and 

investment amounts for individuals who were his friends and family members, but who had 

never invested in Six Degree.  Cimino obtained a $37,500 from one such investor in March 

2016, and he obtained $75,000 from the other investor in August 2017. 

20. Cimino also created a 40-page booklet providing sales and expense forecasts and 

describing Six Degree’s product and business plan.  The booklet falsely reported, for 2015, sales 

of approximately $260,000 and a net profit of approximately $40,000.  As Six Degree did not 

launch its operations until the spring of 2016, these numbers were entirely fictitious.  Cimino 

provided this booklet to at least one investor who invested $37,500 in Six Degree in March 2016.  

21. Cimino later prepared and distributed to investors financial statements that 

contained false information, including reports of sales that had not occurred.  For example, on 

July 18, 2017, Cimino distributed to investors a quarterly update that falsely reported year-to-

date sales in Puerto Rico—one of the few jurisdictions where Six Degree was sold—of 891 cases 

of tequila.  In reality, Six Degree had sold fewer than 200 cases in Puerto Rico.  The report 

Case 7:21-cv-01375   Document 1   Filed 02/17/21   Page 5 of 10



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attached a profit and loss statement that was based on false, inflated sales totals, including the 

false Puerto Rico sales.  One of the investors who received this statement considered it in making 

an additional investment of $75,000 on August 9, 2017. 

22. As the sole person with the power to manage Six Degree and the sole person 

(aside from the one employee who found new distributors for Six Degree) engaged in operating 

Six Degree, Cimino knew or recklessly disregarded that each of these statements were false.  By 

making these statements to potential investors, Cimino knowingly or recklessly engaged in 

deceptive conduct designed to mislead them. 

III. Cimino Misappropriated Investor Funds 

23. Although the Operating Agreement provided that any compensation to the 

Managing Member would require the consent of a majority of the interests of investors, and 

although it restricted the expenses for which Cimino could reimburse himself, Cimino 

continually misappropriated funds raised from investors for personal purposes—often within 

days of it being deposited in Six Degree’s accounts. 

24. Cimino’s first sale of Six Degree membership interests, raising $50,000 from an 

individual, was deposited in Six Degree’s bank account on December 4, 2014.  Four days later, 

on December 8, Cimino transferred approximately $12,412 to his personal checking account, 

$552 to pay his car loan, and $99 to a restaurant.  The next day, on December 9, Cimino 

transferred from Six Degree’s bank account another $4,000 to his personal account.  Cimino 

used the funds to pay his personal expenses.  Seven days after Six Degree received the proceeds 

in its bank account of its next sale of membership interests on December 24, 2014, Cimino made 

another payment from Six Degree’s bank account to his car loan.   

25. This pattern repeated itself throughout the time that Cimino was selling 

membership interests in Six Degree.  When Cimino began ramping up his selling efforts in 

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March 2016, he again transferred significant sums to his personal account.  For example, Six 

Degree obtained an investment of $150,000 in its bank account on April 20, 2016, and one week 

later, Cimino transferred $24,687 from Six Degree’s bank account to his checking account. 

26. Between December 2014 and January 2018, Cimino used a majority of the funds 

raised from investors for unauthorized personal purposes.  He transferred a total of over 

$470,000 from Six Degree’s bank account directly to his personal checking account.  These 

funds constituted substantially all of the funds deposited in Cimino’s personal checking account 

during this period, and Cimino used the funds to pay his living expenses, such as purchases at 

grocery stores, department stores, fast food restaurants, and home improvement stores.   

27. Cimino also spent directly from Six Degree’s bank account more than $28,000 on 

his cars, including payments on car loans; $58,000 in payments to several credit cards; and 

$7,600 in ATM withdrawals.  By the time Cimino was removed as Managing Member, only 

$1,800 remained in Six Degree’s account.  Immediately after Cimino was removed, he accessed 

those funds to make an auto loan payment, a transfer to his account, and a hotel bill payment. 

28. Throughout the time period, Cimino provided prospective investors with the 

Operating Agreement, which represented that any payment of compensation to Cimino would 

require the consent of a majority of the interests of investors.  Cimino did not disclose to 

investors his prior misappropriation or that he intended use a substantial portion of the money he 

raised to fund his living expenses without the consent of the majority of investors.  In doing so, 

Cimino knowingly or recklessly engaged in deceptive conduct designed to mislead and steal 

from Six Degree investors. 

29. Six Degree’s investors lacked the power to remove him unless he violated a 

standard of care that prohibited grossly negligent or reckless conduct, intentional misconduct, 

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fraud, or a knowing violation of law.  In January 2018, after an investor learned of Six Degree’s 

true financial condition and called a meeting of members, Six Degree’s members removed 

Cimino as Six Degree’s Managing Member. 

FIRST CLAIM FOR RELIEF 
Violations of Securities Act Section 17(a) 

 
30. The Commission re-alleges and incorporates by reference here the allegations in 

paragraphs 1 through 29. 

31. Cimino, directly or indirectly, singly or in concert, in the offer or sale of securities 

and by the use of the means or instruments of transportation or communication in interstate 

commerce or the mails, (1) knowingly or recklessly has employed one or more devices, schemes, 

or artifices to defraud, (2) knowingly, recklessly, or negligently has obtained money or property 

by means of one or more untrue statements of a material fact or omissions of a material fact 

necessary in order to make the statements made, in light of the circumstances under which they 

were made, not misleading, and/or (3) knowingly, recklessly, or negligently has engaged in one 

or more transactions, practices, or courses of business which operated or would operate as a 

fraud or deceit upon the purchaser. 

32. By reason of the foregoing, Cimino, directly or indirectly, singly or in concert, 

has violated and, unless enjoined, will again violate Securities Act Section 17(a) [15 U.S.C. 

§ 77q(a)]. 

SECOND CLAIM FOR RELIEF 
Violations of Exchange Act Section 10(b) and Rule 10b-5 Thereunder 

 
33. The Commission re-alleges and incorporates by reference here the allegations in 

paragraphs 1 through 29. 

34. Cimino, directly or indirectly, singly or in concert, in connection with the 

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purchase or sale of securities and by the use of means or instrumentalities of interstate 

commerce, or the mails, or the facilities of a national securities exchange, knowingly or 

recklessly has (i) employed one or more devices, schemes, or artifices to defraud, (ii) made one 

or more untrue statements of a material fact or omitted to state one or more material facts 

necessary in order to make the statements made, in light of the circumstances under which they 

were made, not misleading, and/or (iii) engaged in one or more acts, practices, or courses of 

business which operated or would operate as a fraud or deceit upon other persons. 

35. By reason of the foregoing, Cimino, directly or indirectly, singly or in concert, 

has violated and, unless enjoined, will again violate Exchange Act Section 10(b) [15 U.S.C. 

§ 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]. 

PRAYER FOR RELIEF 

 WHEREFORE, the Commission respectfully requests that the Court enter a Final 

Judgment: 

I. 

Permanently enjoining Cimino and his agents, servants, employees, and attorneys and all 

persons in active concert or participation with any of them from violating, directly or indirectly, 

Securities Act Section 17(a) [15 U.S.C. § 77q(a)], Exchange Act Section 10(b) [15 U.S.C. 

§ 78j(b)], and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]; 

II. 

Ordering Cimino to disgorge all ill-gotten gains he received directly or indirectly, as a 

result of the alleged violations, with pre-judgment interest thereon, pursuant to 15 U.S.C. 

§ 78u(d)(5) and Sections 6501(a)(1) and (a)(3) of the National Defense Authorization Act for 

Fiscal Year 2021, Pub. L. No. 116-283, to be codified at 15 U.S.C. §§ 78u(d)(3) and 78u(d)(7); 

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III. 

Ordering Cimino to pay civil monetary penalties under Securities Act Section 20(d) 

[15 U.S.C. § 77t(d)] and Exchange Act Section 21(d)(3) [15 U.S.C. § 78u(d)(3)]; and 

IV. 

Granting any other and further relief this Court may deem just and proper. 

 
 
Dated: New York, New York 

February 17, 2021 
Respectfully submitted, 
 
/s/ Richard R. Best   
RICHARD R. BEST 
REGIONAL DIRECTOR  
Lara Shalov Mehraban 
Wendy B. Tepperman 
Richard Hong 
Eric C. Kirsch 
Attorneys for Plaintiff 
SECURITIES AND EXCHANGE COMMISSION 
New York Regional Office 
Brookfield Place  
200 Vesey Street, Suite 400 
New York, New York 10281-1022 
(212) 336-0956 (Hong) 
[email protected] 

Case 7:21-cv-01375   Document 1   Filed 02/17/21   Page 10 of 10


	RICHARD R. BEST
	Regional Director
	Lara Shalov Mehraban
	Wendy B. Tepperman
	Richard Hong
	Eric C. Kirsch
	Attorneys for Plaintiff
	SECURITIES AND EXCHANGE COMMISSION
	New York Regional Office
	Brookfield Place
	200 Vesey Street, Suite 400
	New York, New York 10281-1022
	(212) 336-0956 (Hong)
	[email protected]
	Plaintiff Securities and Exchange Commission (“Commission”), for its Complaint against Defendant Joseph Cimino (“Cimino”), alleges as follows:
	SUMMARY
	1. This case involves fraud perpetrated by Cimino in connection with sales of securities issued by 6 Degree Tequila, LLC (“Six Degree”), a private company Cimino founded purportedly creating and distributing its own brand of tequila.  Cimino knowingly...
	2. Between December 2014 and September 2017, Cimino personally solicited investors for Six Degree and raised approximately $985,000 from approximately 24 investors, most of whom were located in New York or New Jersey.
	3. Cimino presented Six Degree as a start-up company that had already successfully raised funds from a number of investors.  An investor list that Cimino maintained and gave to investors contained false investor names and dollar amounts, creating the ...
	4. As he raised funds from investors, Cimino instead misappropriated most of those funds for personal purposes, such as purchases at grocery stores, department stores, fast food restaurants, and home improvement stores.
	VIOLATIONS
	5. By virtue of the foregoing conduct and as alleged further herein, Cimino has violated Section 17(a) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. § 77q(a)], Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S...
	6. Unless Cimino is restrained and enjoined, he will engage in the acts, practices, transactions, and courses of business set forth in this Complaint or in acts, practices, transactions, and courses of business of similar type and object.
	NATURE OF THE PROCEEDINGS AND RELIEF SOUGHT
	7. The Commission brings this action pursuant to the authority conferred upon it by Securities Act Sections 20(b) and 20(d) [15 U.S.C. §§ 77t(b) and 77t(d)] and Exchange Act Section 21(d) [15 U.S.C. § 78u(d)].
	8. The Commission seeks a final judgment: (a) permanently enjoining Cimino from violating the federal securities laws and rules this Complaint alleges he has violated; (b) ordering Cimino to disgorge all ill-gotten gains he received as a result of the...
	JURISDICTION AND VENUE
	9. This Court has jurisdiction over this action pursuant to Securities Act Section 22(a) [15 U.S.C. § 77v(a)] and Exchange Act Section 27 [15 U.S.C. § 78aa].
	10. Cimino, directly and indirectly, has made use of the means or instrumentalities of interstate commerce or of the mails in connection with the transactions, acts, practices, and courses of business alleged herein.
	11. Venue lies in this District under Securities Act Section 22(a) [15 U.S.C. § 77v(a)] and Exchange Act Section 27 [15 U.S.C. § 78aa].  Cimino may be found in, is an inhabitant of, or transacts business in the Southern District of New York, and certa...
	DEFENDANT
	12. Cimino, age 56, is a resident of Warwick, NY.  He incorporated Six Degree on June 30, 2014 and served as its sole Managing Member until January 2018.
	OTHER RELEVANT ENTITY
	13. Six Degree was a New York limited liability corporation with its principal place of business in Warwick, New York.  Six Degree distributed its own brand of tequila, which was manufactured for Six Degree by a distiller in Mexico.  In addition to Ci...
	14. Cimino solicited investors to purchase membership interests in Six Degree between December 2014 and September 2017, raising approximately $985,000 in total.  Cimino personally solicited each of the investors.  On at least several of those occasion...
	15. Cimino provided prospective investors with an Operating Agreement and a Membership Agreement.
	16. The Six Degree Operating Agreement appointed Cimino as sole Managing Member and granted him a 51% initial membership interest in exchange for cash and services in kind.  Under the Operating Agreement, Cimino was not entitled to a salary or any oth...
	17. To purchase Six Degree shares, investors signed the Operating Agreement and the Membership Agreement, which gave them a percentage ownership interest based on the amount they invested and a pro rata entitlement to profits and losses.
	18. The Operating Agreement required each investor to represent and warrant that the investor was acquiring its interest in the company for the investor’s own account as an investment and without an intent to distribute the interest.  It also provided...
	II. Cimino Knowingly or Recklessly Misrepresented and Omitted Material Facts
	19. Cimino created and maintained lists of Six Degree’s investors.  However, in at least two instances, Cimino provided purported investor lists that included false entries to potential investors to induce them to invest in Six Degree.  Cimino falsely...
	20. Cimino also created a 40-page booklet providing sales and expense forecasts and describing Six Degree’s product and business plan.  The booklet falsely reported, for 2015, sales of approximately $260,000 and a net profit of approximately $40,000. ...
	21. Cimino later prepared and distributed to investors financial statements that contained false information, including reports of sales that had not occurred.  For example, on July 18, 2017, Cimino distributed to investors a quarterly update that fal...
	22. As the sole person with the power to manage Six Degree and the sole person (aside from the one employee who found new distributors for Six Degree) engaged in operating Six Degree, Cimino knew or recklessly disregarded that each of these statements...
	III. Cimino Misappropriated Investor Funds
	23. Although the Operating Agreement provided that any compensation to the Managing Member would require the consent of a majority of the interests of investors, and although it restricted the expenses for which Cimino could reimburse himself, Cimino ...
	24. Cimino’s first sale of Six Degree membership interests, raising $50,000 from an individual, was deposited in Six Degree’s bank account on December 4, 2014.  Four days later, on December 8, Cimino transferred approximately $12,412 to his personal c...
	25. This pattern repeated itself throughout the time that Cimino was selling membership interests in Six Degree.  When Cimino began ramping up his selling efforts in March 2016, he again transferred significant sums to his personal account.  For examp...
	26. Between December 2014 and January 2018, Cimino used a majority of the funds raised from investors for unauthorized personal purposes.  He transferred a total of over $470,000 from Six Degree’s bank account directly to his personal checking account...
	27. Cimino also spent directly from Six Degree’s bank account more than $28,000 on his cars, including payments on car loans; $58,000 in payments to several credit cards; and $7,600 in ATM withdrawals.  By the time Cimino was removed as Managing Membe...
	28. Throughout the time period, Cimino provided prospective investors with the Operating Agreement, which represented that any payment of compensation to Cimino would require the consent of a majority of the interests of investors.  Cimino did not dis...
	29. Six Degree’s investors lacked the power to remove him unless he violated a standard of care that prohibited grossly negligent or reckless conduct, intentional misconduct, fraud, or a knowing violation of law.  In January 2018, after an investor le...
	Violations of Securities Act Section 17(a)
	30. The Commission re-alleges and incorporates by reference here the allegations in paragraphs 1 through 29.
	31. Cimino, directly or indirectly, singly or in concert, in the offer or sale of securities and by the use of the means or instruments of transportation or communication in interstate commerce or the mails, (1) knowingly or recklessly has employed on...
	32. By reason of the foregoing, Cimino, directly or indirectly, singly or in concert, has violated and, unless enjoined, will again violate Securities Act Section 17(a) [15 U.S.C. § 77q(a)].
	Violations of Exchange Act Section 10(b) and Rule 10b-5 Thereunder
	33. The Commission re-alleges and incorporates by reference here the allegations in paragraphs 1 through 29.
	34. Cimino, directly or indirectly, singly or in concert, in connection with the purchase or sale of securities and by the use of means or instrumentalities of interstate commerce, or the mails, or the facilities of a national securities exchange, kno...
	35. By reason of the foregoing, Cimino, directly or indirectly, singly or in concert, has violated and, unless enjoined, will again violate Exchange Act Section 10(b) [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5].
	PRAYER FOR RELIEF
	Dated: New York, New York
	Lara Shalov Mehraban
	Wendy B. Tepperman
	Richard Hong
	Eric C. Kirsch
	Attorneys for Plaintiff
	SECURITIES AND EXCHANGE COMMISSION
	New York Regional Office
	Brookfield Place
	200 Vesey Street, Suite 400
	New York, New York 10281-1022