SEC v. James Siniscalchi, Southern District of New York (Apr. 29, 2019) — Complaint

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

SECURITIES AND EXCHANGE
COMMISSION,

   Plaintiff,

 v.

JAMES SINISCALCHI,

   Defendant.

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Civil Action No.

JURY TRIAL DEMANDED

COMPLAINT

Plaintiff Securities and Exchange Commission (the “Commission”) alleges the following

against Defendant James Siniscalchi (“Siniscalchi”).

SUMMARY

1. This is a securities fraud enforcement action.  Siniscalchi engaged in a scheme to

defraud investors between approximately May 2017 and at least mid-2018.  Starting no later than

May 2017 and continuing through at least December 2017, Company A and its affiliated

investment funds fraudulently raised a net amount of at least approximately $2.7 million from at

least 12 investors.  Company A, through Siniscalchi—Company A’s Chief Compliance

Officer—falsely represented to investors that their money would be exclusively used to purchase

certain show tickets, which Company A intended to resell at a profit.  In reality, Siniscalchi

knowingly misused investor assets for the benefit of himself and his extended family.

Thereafter, through at least mid-2018, Siniscalchi schemed to conceal his conduct from

Company A’s investors.

2. As a result of the conduct alleged herein, Siniscalchi violated, and unless

restrained and enjoined will continue to violate, Section 17(a) of the Securities Act of 1933

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(“Securities Act”), and Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”)

and Rules 10b-5(a) and (c) thereunder.

3. The Commission seeks a permanent injunction enjoining Siniscalchi from

engaging in the transactions, acts, practices, and courses of business alleged in this Complaint,

disgorgement of all ill-gotten gains from the unlawful conduct set forth herein together with

prejudgment interest, civil penalties, and such other relief as the Court may deem appropriate.

JURISDICTION AND VENUE

4. This Court has jurisdiction over this action pursuant to Section 22(a) of the

Securities Act [15 U.S.C. § 77v(a)] and Sections 21(d), 21(e), and 27 of the Exchange Act

[15 U.S.C. §§ 78u(d), 78u(e), and 78aa].

5. Venue lies in this Court pursuant to Section 22(a) of the Securities Act [15 U.S.C.

§ 77v(a)] and Section 27 of the Exchange Act [15 U.S.C. § 78aa].  Certain of the acts, practices,

transactions and courses of business alleged in this Complaint occurred within the Southern

District of New York, and were effected, directly or indirectly, by making use of means or

instrumentalities of transportation or communication in interstate commerce, or the mails.

Among other things, Siniscalchi resides in this district.

THE DEFENDANT

6. James Siniscalchi, age 46, lives in New York, New York.  Siniscalchi is the first

cousin of Joseph Meli.  During the time period of the conduct alleged herein, Siniscalchi was the

Chief Compliance Officer of Company A.

RELATED PARTIES

7. Joseph Meli (“Meli”), age 44, is presently serving a 78-month federal prison

sentence in connection with his conviction by guilty plea in United States v. Joseph Meli, et al.,

17-cr-127 (S.D.N.Y.).  In that case, as well as in two related Commission actions—SEC v.

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Joseph Meli, et al., 17-cv-632 (S.D.N.Y.) and SEC v. Craig H. Carton, et al., 17-cv-6764

(S.D.N.Y.)—Meli and several entities under his control were charged with operating schemes in

which Meli misappropriated investor funds after representing that investors’ money would be

used to buy and resell large blocks of tickets to Broadway shows and concerts.  Before reporting

to prison in June 2018, Meli lived with his wife and their children in New York, New York.

8. Company A is a Delaware limited liability company formed in May 2017 with a

principal place of business in Santa Monica, California.  Company A is indirectly (each through

an entity) 50-50 owned by two individuals, referred to herein as Company A’s Chief Executive

Officer (“CEO”) and Chief Financial Officer (“CFO”), respectively.  The CEO and CFO were

both authorized co-signers on some Company A bank accounts, while for other Company A

accounts the CFO was the sole authorized signer.  Company A Fund LLC and Company A Fund

I LLC (collectively, the “Company A Investment Funds”) are investment funds related to

Company A.

FACTS

Background: The Joseph Meli Fraud

9. Starting no later than early 2015 and continuing through January 2017, Meli

controlled and operated multiple entities, including Advance Entertainment, LLC and other

similar entities, which he claimed were companies with agreements to purchase large blocks of

tickets to Broadway shows and other live events.  Meli enticed investors to pay Advance

Entertainment, LLC and his similar entities tens of millions of dollars.

10. Meli falsely represented to investors that he, directly or indirectly, would buy

tickets with the investors’ pooled money and then resell those tickets at higher prices for

handsome investment returns.  In reality, Meli was misusing investor money.

11. In or about January 2017, Meli was arrested by the Federal Bureau of

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Investigation and charged by the United States Attorney’s Office for the Southern District of

New York with engaging in a scheme through Advance Entertainment, LLC and Meli’s similar

entities.

12. Similarly, in or about January 2017, the Commission charged Meli, Advance

Entertainment, LLC, and Meli’s similar entities with fraud and froze assets associated with

Meli’s fraud.

13. In October 2017, Meli pleaded guilty to engaging in a fraudulent ticket resale

scheme through Advance Entertainment, LLC and his similar entities.

Siniscalchi and His Partners Rebrand Meli’s Entities as Company A

14. In the wake of Meli’s arrest, Siniscalchi, along with Company A’s CEO and CFO,

rebranded Meli’s entities—with Meli’s knowledge and help—in an effort to raise money from

investors based on a pitch similar to the one Meli had made to his investors.

15. To assist in the launch of Company A, Meli provided Siniscalchi and his

Company A partners with copies of the documentation Meli had used to sign up investors in his

prior ventures, including Advance Entertainment, LLC and Meli’s similar entities:

a. In or about March 2017, Meli emailed various Advance Entertainment, LLC

documents to Company A’s CEO.  These documents included standardized

investment agreements, or “Funding Agreements,” between Advance

Entertainment, LLC and its investors.

b. In or about May 2017, Meli emailed Siniscalchi various documents of another

one of the entities Meli had used to perpetrate his fraudulent ticket resale

scheme.  These documents included an executive summary, a standardized

investment agreement, and a limited liability company agreement.

c. Later the same day in or about May 2017, Siniscalchi forwarded Meli’s

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documents to Company A’s CEO with a subject line of “Useful Model Docs”

and the message: “Enclosed are some docs I think you’ll find useful as you set

up your new entertainment venture.”

16. In May 2017, Company A’s CFO formally established Company A.  Siniscalchi

subsequently became Company A’s Chief Compliance Officer.

17. At or about the same time, Company A began soliciting investors with an

investment pitch that was much like the one Meli had employed prior to his January 2017 arrest.

The gist of Company A’s pitch was that Company A had special access to obtain large quantities

of highly sought-after Broadway theater and sporting event tickets that could be resold for big

profits.

18. More specifically, Company A claimed to investors that Company A would pool

investor funds and use them to purchase large blocks of tickets and to resell those tickets for a

substantial markup.

19. Company A’s investment pitch, like those Meli had used previously, included

specific written representations regarding the use of investors’ money and the protection of the

investors’ interests, typically including Company A’s representation that Company A (and its

officers) would not make any money until investors had recouped at least most or all of their

initial contributions.  Company A additionally promised some investors to pay them an initial

profit (which varied in percentage) before Company A would start to make any money.

20. The documentation Company A provided to investors varied as to the specific

profit-sharing terms promised to investors.  For example, one Company A “Funding Agreement”

with a particular investor provided:

“Allocation of Proceeds from Re-Sale of Tickets.  [Company A] shall use his [sic] best

efforts to resell the tickets for profit in good faith.  The proceeds from the resale of the

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Tickets will be distributed as follows:

a) First, 90% of all proceeds shall be allocated and distributed to Investor, and

10% shall be allocated and distributed to [Company A] until Investor has

received 200% of its original investment;

b) Thereafter, there will be a 50-50 split of proceeds between Investor and

[Company A].”

21. Company A’s representations about its business were essentially a reiteration of

Meli’s claims about Advance Entertainment, LLC and Meli’s similar entities used to perpetrate

the fraudulent ticket resale scheme that led to his January 2017 arrest and civil charges.

22. As Siniscalchi knew, Meli was secretly involved in Company A’s business from

its inception, at which time the widely publicized civil and criminal cases against Meli were

pending.  Siniscalchi also knew that Meli’s secret involvement continued even after Meli pled

guilty to the criminal charges.  Siniscalchi also understood that Meli expected to—and did—

share in the money raised by Company A.

23. To avoid scaring away investors, Siniscalchi took great pains to conceal Meli’s

involvement in Company A’s business.  Siniscalchi knew, or was reckless in not knowing, that

Meli’s continuing role with Company A following his arrest would have been important

information that any reasonable investor would have wanted to know before parting with his/her

money.  Had investors known of Meli’s involvement, they would have—at the very least—been

alerted to the riskiness of investing in a business that was associated with an individual who had

been charged with defrauding investors in a very similar business.

24. To remind Company A personnel that Meli’s involvement must be concealed

from investors, Siniscalchi often referred to Meli as “Keyser Soze” (or simply “K”), in reference

to the fictional movie character who secretly operated as a crime kingpin while disguising his

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involvement.  Siniscalchi instructed Company A’s staff not to include Meli on emails and other

written communications to investors.

25. Siniscalchi was vigilant in making sure Meli’s role was concealed.  For example,

on or about March 26, 2018, when an employee of Company A inadvertently included Meli’s

name on the “cc” line of an email to an individual investor, Siniscalchi wrote to Company A’s

CEO and CFO:

“Guys – we potentially have a major [expletive] problem.  I haven’t mentioned it to K

[i.e., Meli] yet but [the employee] accidentally put his name . . . in the email stream to [an

investor]. . . . Do you have any idea how potentially catastrophic that could be?! . . . I’m

sure it was a mistake, but Jesus . . . this is bad . . . really really bad.  You guys think I’m

obsessive about security – this is why . . . . we need to be concerned about how to cope

with the leak, and I’ve got to figure out how to get the info to K [i.e., Meli] . . . .”

Company A’s Representations About the Use of Investor Money

26. Company A raised at least approximately $2.7 million in net funds between

approximately May 2017 and at least December 2017 from at least 12 investors, based on

representations that the investors’ money would be used to purchase blocks of tickets to at least

four different live events: Harry Potter and the Cursed Child on Broadway, Hello Dolly on

Broadway, Bruce Springsteen on Broadway, and an August 2017 professional boxing match

between Floyd Mayweather Jr. and Conor McGregor.

27. In collecting investments from various individuals, Company A provided

documentation that reflected the essential terms of the original investment pitch.  In some

instances, the terms were set forth in “Funding Agreements.”  In other instances, following the

formation of the Company A Investment Funds in August/September 2017, investors received

private placement memoranda.

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28. For example, on or about June 7, 2017, Company A’s CFO sent a Funding

Agreement to Investor-1 via email.  Company A’s CFO represented to Investor-1, in pertinent

part, “[a]s you know, Company A does not get paid any management fee on [the purported ticket

deals] until tickets are sold and then the split is 90:10 in favour of the investor until 200% is

returned to the investor.”

29. The Funding Agreement specifically referred to Investor-1 as an “Investor” and

made clear that Investor-1’s money would be used “to fund the purchase of [tickets] in exchange

for a sharing of proceeds from the re-sale of the Tickets.”  Company A’s Funding Agreements,

therefore, created investment contracts between Company A and its investors, including

Investor-1.

30. On or about June 8, 2017, Investor-1 executed two Funding Agreements and

agreed to invest a total of $350,000 (investing $50,000 and $300,000 respectively).

31. In the Funding Agreements, Company A represented that:

a. “[Company A] is in the business of purchasing and reselling concert, sports,

and theatrical tickets”; and

b. “[Company A] is currently in discussions with representatives, ticket holders,

and right’s [sic] holders of: World Class Intellectual Properties, Top 50

Concert Touring Acts, and Mega Sporting Events.  The concert, sports and

theatrical tickets are all together referred to as ‘The [Company A] Ticket

Inventory.’”

32. Company A also promised Investor-1 that Company A would only be entitled to

use the $350,000 to “fund the purchase of [certain tickets] or selected segments of the [Company

A] Ticket Inventory in exchange for a sharing of proceeds from the re-sale of the Tickets” and

that “[Company A] . . . agree[d] to use invested funds to purchase at their sole discretion the

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tickets identified in Exhibit A . . . .”  Exhibit A to Investor-1’s Funding Agreements identified

two sets of tickets: Harry Potter and the Cursed Child and Hello Dolly.

33. Siniscalchi knew, or was reckless in not knowing, that Company A promised to

use investor money exclusively to purchase tickets, and knew, or was reckless in not knowing,

that those promises were false.

Siniscalchi Knowingly Misused Investor Funds

34. Company A claimed to its investors that it had a unique pipeline to certain ticket

inventories.  But, Company A did not purchase tickets directly.  Instead, Siniscalchi acted as an

intermediary between Company A and the supposed ticket inventory.  In particular, Siniscalchi

represented that he could buy tickets, directly or indirectly, and that after doing so he would sell

those tickets to Company A.  This arrangement was typically memorialized in a contract (i.e., a

“Letter Agreement”).

35. In particular, each time Company A and an investor or group of investors

executed (or was expected to execute) a Funding Agreement, Company A also entered into a

corresponding Letter Agreement with Siniscalchi.  On their face, the Letter Agreements created

an arrangement, in substance, wherein Company A agreed to purchase—and Siniscalchi agreed

to sell to Company A—a specified number of tickets at a cost that correlated with investment

amounts per the investors’ Funding Agreements.

36. For example, on or about June 4, 2017, Company A entered into a Letter

Agreement with a company called JJS Entertainment, LLC that corresponded with a Funding

Agreement signed by Investor-1 in early June 2017.  The Letter Agreement stated, in pertinent

part: “This Letter Agreement . . . is made by and between [COMPANY A] and JJS

ENTERTAINMENT, LLC (‘Seller’) in order to facilitate [Company A]’s purchase of ‘Tickets’

. . . from Seller for Broadway performances of ‘Harry Potter and the Cursed Child’ . . . . Seller

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has title to, or the unconditional right to obtain, the Tickets free and clear of any claim, lien or

encumbrance and has the unqualified right to sell them to [Company A].”

37. Siniscalchi was the sole owner and control person of JJS Entertainment, LLC.

Siniscalchi signed the June 4, 2017 Letter Agreement as JJS Entertainment, LLC’s Managing

Member.

38. Company A and JJS Entertainment, LLC entered into two similar Letter

Agreements—with nearly identical language—on or about June 9, 2017, for the purchase of

Hello Dolly tickets.  Like the June 4, 2017 Letter Agreement, the June 9, 2017 Letter

Agreements corresponded with Funding Agreements signed by Investor-1 in early June 2017.

39. Siniscalchi signed the June 9, 2017 Letter Agreements as JJS Entertainment,

LLC’s Managing Member.

40. Siniscalchi was the sole signatory on the JJS Entertainment, LLC bank account

into which Company A transferred Investor-1’s money.

41. As set forth in the Funding and Letter Agreements concerning Investor-1’s

investment, Siniscalchi was obligated to use the monies invested by Investor-1 only to purchase

specified tickets.  And, Siniscalchi knew, or was reckless in not knowing, that he was obligated

to use Investor-1’s money (as was the case for all of Company A’s investors) exclusively to

purchase tickets.  But, in actuality, and as the examples below illustrate, Siniscalchi knowingly

or recklessly misused the vast majority of the Investor-1’s money, as well as money provided by

other investors.

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42. Overall, Siniscalchi, directly or indirectly, knowingly or recklessly misused the

vast majority of the at least approximately $2.7 million net amount invested by at least 12

investors with Company A between approximately May 2017 and at least December 2017.

Siniscalchi misappropriated more than half of the investor funds raised by Company A for his

benefit and the benefit of Meli and Meli’s family.  Siniscalchi misappropriated additional

investor funds (a) to make payments to certain earlier investors in Ponzi-like fashion in order to

conceal the fraud; and (b) to make payments to third parties who had no apparent connection to

the ticket or entertainment industry.

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FIRST CLAIM FOR RELIEF
FRAUD IN THE OFFER OR SALE OF SECURITIES

(Violations of Section 17(a) of the Securities Act)

43. The Commission repeats and incorporates by reference the allegations in

paragraphs 1-42 above.

44. By reason of the conduct described above, the Defendant, in the offer or sale of

securities, by the use of the means or instrumentalities of interstate commerce or of the mails,

directly or indirectly, acting with the requisite degree of knowledge or state of mind (i) employed

devices, schemes, or artifices to defraud; (ii) obtained money or property by means of any untrue

statement of a material fact or any omission to state a material fact necessary in order to make

the statements made, in the light of the circumstances under which they were made, not

misleading; and (iii) engaged in transactions, practices, or courses of business which operated or

would operate as a fraud or deceit upon any persons, including purchasers or sellers of the

securities.

45. By reason of the conduct described above, the Defendant violated Securities Act

Section 17(a) [15 U.S.C. § 77q(a)].

SECOND CLAIM FOR RELIEF
FRAUD IN CONNECTION WITH THE PURCHASE OR SALE OF SECURITIES

(Violations of Section 10(b) of the Exchange Act and Rules 10b-5(a) and (c))

46. The Commission repeats and incorporates by reference the allegations in

paragraphs 1-42 above.

47. By reason of the conduct described above, the Defendant, directly or indirectly, in

connection with the purchase or sale of securities, by the use of the means or instrumentalities of

interstate commerce or of the mails, or of any facility of any national securities exchange,

intentionally, knowingly or recklessly, (i) employed devices, schemes, or artifices to defraud;

and (ii) engaged in acts, practices, or courses of business which operated or would operate as a

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fraud or deceit upon any persons, including purchasers or sellers of the securities.

48. By reason of the conduct described above, the Defendant violated Exchange Act

Section 10(b) [15 U.S.C. § 78j(b)] and Rules 10b-5(a) and (c) [17 C.F.R. § 240.10b-5(a) and (c)]

thereunder.

PRAYER FOR RELIEF

WHEREFORE, the Commission respectfully requests that this Court:

A. Enter a permanent injunction restraining the Defendant and each of his officers,

agents, servants, employees, attorneys, and those persons in active concert or participation with

him who receive actual notice of the injunction by personal service or otherwise, including

email, fax, or overnight delivery service, from directly or indirectly engaging in the conduct

described above, or in conduct of similar purport and effect, in violation of:

1. Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rules 10b-
5(a) and (c) thereunder [17 C.F.R. 240.10b-5(a) and (c)]; and

2. Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)].

B. Order the Defendant to disgorge his ill-gotten gains, plus prejudgment interest;

C. Order the Defendant to pay appropriate civil monetary penalties in accordance

with Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the

Exchange Act [15 U.S.C. § 78u(d)(3)];

D. Retain jurisdiction over this action to implement and carry out the terms of all

orders and decrees that may be entered; and

E. Grant such other and further relief as this Court may deem just and proper.

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JURY DEMAND

The Commission demands a jury in this matter for all claims so triable.

Dated: April 29, 2019
 Boston, MA   Respectfully submitted,

    SECURITIES AND EXCHANGE COMMISSION

By its attorneys,

     /s/ Alicia M. Reed
Alicia M. Reed (NY Bar # 4913596)
Dahlia Rin* (MA Bar # 674137)
Eric A. Forni* (MA Bar # 669685)
Martin F. Healey* (MA Bar # 227550)
U.S. Securities and Exchange Commission
Boston Regional Office
33 Arch St., 24th Floor
Boston, MA 02110
(617) 573-8827 (Forni)
[email protected]

*Not admitted in the S.D.N.Y.

UNITED STATES DISTRICT COURT 
SOUTHERN DISTRICT OF NEW YORK 

 
 
SECURITIES AND EXCHANGE 
COMMISSION, 

   Plaintiff, 

 v. 

JAMES SINISCALCHI, 

   Defendant. 

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Civil Action No.  
 
JURY TRIAL DEMANDED 

 
 
 

 

COMPLAINT 

Plaintiff Securities and Exchange Commission (the “Commission”) alleges the following 

against Defendant James Siniscalchi (“Siniscalchi”). 

SUMMARY 

1. This is a securities fraud enforcement action.  Siniscalchi engaged in a scheme to 

defraud investors between approximately May 2017 and at least mid-2018.  Starting no later than 

May 2017 and continuing through at least December 2017, Company A and its affiliated 

investment funds fraudulently raised a net amount of at least approximately $2.7 million from at 

least 12 investors.  Company A, through Siniscalchi—Company A’s Chief Compliance 

Officer—falsely represented to investors that their money would be exclusively used to purchase 

certain show tickets, which Company A intended to resell at a profit.  In reality, Siniscalchi 

knowingly misused investor assets for the benefit of himself and his extended family.  

Thereafter, through at least mid-2018, Siniscalchi schemed to conceal his conduct from 

Company A’s investors.      

2. As a result of the conduct alleged herein, Siniscalchi violated, and unless 

restrained and enjoined will continue to violate, Section 17(a) of the Securities Act of 1933 

Case 1:19-cv-03792   Document 1   Filed 04/29/19   Page 1 of 15



 

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(“Securities Act”), and Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) 

and Rules 10b-5(a) and (c) thereunder.  

3. The Commission seeks a permanent injunction enjoining Siniscalchi from 

engaging in the transactions, acts, practices, and courses of business alleged in this Complaint, 

disgorgement of all ill-gotten gains from the unlawful conduct set forth herein together with 

prejudgment interest, civil penalties, and such other relief as the Court may deem appropriate. 

JURISDICTION AND VENUE 

4. This Court has jurisdiction over this action pursuant to Section 22(a) of the 

Securities Act [15 U.S.C. § 77v(a)] and Sections 21(d), 21(e), and 27 of the Exchange Act 

[15 U.S.C. §§ 78u(d), 78u(e), and 78aa]. 

5. Venue lies in this Court pursuant to Section 22(a) of the Securities Act [15 U.S.C. 

§ 77v(a)] and Section 27 of the Exchange Act [15 U.S.C. § 78aa].  Certain of the acts, practices, 

transactions and courses of business alleged in this Complaint occurred within the Southern 

District of New York, and were effected, directly or indirectly, by making use of means or 

instrumentalities of transportation or communication in interstate commerce, or the mails. 

Among other things, Siniscalchi resides in this district.  

THE DEFENDANT 

6. James Siniscalchi, age 46, lives in New York, New York.  Siniscalchi is the first 

cousin of Joseph Meli.  During the time period of the conduct alleged herein, Siniscalchi was the 

Chief Compliance Officer of Company A.   

RELATED PARTIES 

7. Joseph Meli (“Meli”), age 44, is presently serving a 78-month federal prison 

sentence in connection with his conviction by guilty plea in United States v. Joseph Meli, et al., 

17-cr-127 (S.D.N.Y.).  In that case, as well as in two related Commission actions—SEC v. 

Case 1:19-cv-03792   Document 1   Filed 04/29/19   Page 2 of 15



 

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Joseph Meli, et al., 17-cv-632 (S.D.N.Y.) and SEC v. Craig H. Carton, et al., 17-cv-6764 

(S.D.N.Y.)—Meli and several entities under his control were charged with operating schemes in 

which Meli misappropriated investor funds after representing that investors’ money would be 

used to buy and resell large blocks of tickets to Broadway shows and concerts.  Before reporting 

to prison in June 2018, Meli lived with his wife and their children in New York, New York. 

8. Company A is a Delaware limited liability company formed in May 2017 with a 

principal place of business in Santa Monica, California.  Company A is indirectly (each through 

an entity) 50-50 owned by two individuals, referred to herein as Company A’s Chief Executive 

Officer (“CEO”) and Chief Financial Officer (“CFO”), respectively.  The CEO and CFO were 

both authorized co-signers on some Company A bank accounts, while for other Company A 

accounts the CFO was the sole authorized signer.  Company A Fund LLC and Company A Fund 

I LLC (collectively, the “Company A Investment Funds”) are investment funds related to 

Company A.   

FACTS 

Background: The Joseph Meli Fraud 

9. Starting no later than early 2015 and continuing through January 2017, Meli 

controlled and operated multiple entities, including Advance Entertainment, LLC and other 

similar entities, which he claimed were companies with agreements to purchase large blocks of 

tickets to Broadway shows and other live events.  Meli enticed investors to pay Advance 

Entertainment, LLC and his similar entities tens of millions of dollars. 

10. Meli falsely represented to investors that he, directly or indirectly, would buy 

tickets with the investors’ pooled money and then resell those tickets at higher prices for 

handsome investment returns.  In reality, Meli was misusing investor money.     

11. In or about January 2017, Meli was arrested by the Federal Bureau of 

Case 1:19-cv-03792   Document 1   Filed 04/29/19   Page 3 of 15



 

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Investigation and charged by the United States Attorney’s Office for the Southern District of 

New York with engaging in a scheme through Advance Entertainment, LLC and Meli’s similar 

entities.   

12. Similarly, in or about January 2017, the Commission charged Meli, Advance 

Entertainment, LLC, and Meli’s similar entities with fraud and froze assets associated with 

Meli’s fraud.   

13. In October 2017, Meli pleaded guilty to engaging in a fraudulent ticket resale 

scheme through Advance Entertainment, LLC and his similar entities.  

Siniscalchi and His Partners Rebrand Meli’s Entities as Company A  

14. In the wake of Meli’s arrest, Siniscalchi, along with Company A’s CEO and CFO, 

rebranded Meli’s entities—with Meli’s knowledge and help—in an effort to raise money from 

investors based on a pitch similar to the one Meli had made to his investors.  

15. To assist in the launch of Company A, Meli provided Siniscalchi and his 

Company A partners with copies of the documentation Meli had used to sign up investors in his 

prior ventures, including Advance Entertainment, LLC and Meli’s similar entities: 

a. In or about March 2017, Meli emailed various Advance Entertainment, LLC 

documents to Company A’s CEO.  These documents included standardized 

investment agreements, or “Funding Agreements,” between Advance 

Entertainment, LLC and its investors. 

b. In or about May 2017, Meli emailed Siniscalchi various documents of another 

one of the entities Meli had used to perpetrate his fraudulent ticket resale 

scheme.  These documents included an executive summary, a standardized 

investment agreement, and a limited liability company agreement.  

c. Later the same day in or about May 2017, Siniscalchi forwarded Meli’s 

Case 1:19-cv-03792   Document 1   Filed 04/29/19   Page 4 of 15



 

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documents to Company A’s CEO with a subject line of “Useful Model Docs” 

and the message: “Enclosed are some docs I think you’ll find useful as you set 

up your new entertainment venture.”   

16. In May 2017, Company A’s CFO formally established Company A.  Siniscalchi 

subsequently became Company A’s Chief Compliance Officer.  

17. At or about the same time, Company A began soliciting investors with an 

investment pitch that was much like the one Meli had employed prior to his January 2017 arrest.  

The gist of Company A’s pitch was that Company A had special access to obtain large quantities 

of highly sought-after Broadway theater and sporting event tickets that could be resold for big 

profits. 

18. More specifically, Company A claimed to investors that Company A would pool 

investor funds and use them to purchase large blocks of tickets and to resell those tickets for a 

substantial markup.  

19. Company A’s investment pitch, like those Meli had used previously, included 

specific written representations regarding the use of investors’ money and the protection of the 

investors’ interests, typically including Company A’s representation that Company A (and its 

officers) would not make any money until investors had recouped at least most or all of their 

initial contributions.  Company A additionally promised some investors to pay them an initial 

profit (which varied in percentage) before Company A would start to make any money.    

20. The documentation Company A provided to investors varied as to the specific 

profit-sharing terms promised to investors.  For example, one Company A “Funding Agreement” 

with a particular investor provided: 

“Allocation of Proceeds from Re-Sale of Tickets.  [Company A] shall use his [sic] best 

efforts to resell the tickets for profit in good faith.  The proceeds from the resale of the 

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Tickets will be distributed as follows: 

a) First, 90% of all proceeds shall be allocated and distributed to Investor, and 

10% shall be allocated and distributed to [Company A] until Investor has 

received 200% of its original investment; 

b) Thereafter, there will be a 50-50 split of proceeds between Investor and 

[Company A].” 

21. Company A’s representations about its business were essentially a reiteration of 

Meli’s claims about Advance Entertainment, LLC and Meli’s similar entities used to perpetrate 

the fraudulent ticket resale scheme that led to his January 2017 arrest and civil charges. 

22. As Siniscalchi knew, Meli was secretly involved in Company A’s business from 

its inception, at which time the widely publicized civil and criminal cases against Meli were 

pending.  Siniscalchi also knew that Meli’s secret involvement continued even after Meli pled 

guilty to the criminal charges.  Siniscalchi also understood that Meli expected to—and did—

share in the money raised by Company A.    

23. To avoid scaring away investors, Siniscalchi took great pains to conceal Meli’s 

involvement in Company A’s business.  Siniscalchi knew, or was reckless in not knowing, that 

Meli’s continuing role with Company A following his arrest would have been important 

information that any reasonable investor would have wanted to know before parting with his/her 

money.  Had investors known of Meli’s involvement, they would have—at the very least—been 

alerted to the riskiness of investing in a business that was associated with an individual who had 

been charged with defrauding investors in a very similar business.   

24. To remind Company A personnel that Meli’s involvement must be concealed 

from investors, Siniscalchi often referred to Meli as “Keyser Soze” (or simply “K”), in reference 

to the fictional movie character who secretly operated as a crime kingpin while disguising his 

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involvement.  Siniscalchi instructed Company A’s staff not to include Meli on emails and other 

written communications to investors.   

25. Siniscalchi was vigilant in making sure Meli’s role was concealed.  For example, 

on or about March 26, 2018, when an employee of Company A inadvertently included Meli’s 

name on the “cc” line of an email to an individual investor, Siniscalchi wrote to Company A’s 

CEO and CFO:  

“Guys – we potentially have a major [expletive] problem.  I haven’t mentioned it to K 

[i.e., Meli] yet but [the employee] accidentally put his name . . . in the email stream to [an 

investor]. . . . Do you have any idea how potentially catastrophic that could be?! . . . I’m 

sure it was a mistake, but Jesus . . . this is bad . . . really really bad.  You guys think I’m 

obsessive about security – this is why . . . . we need to be concerned about how to cope 

with the leak, and I’ve got to figure out how to get the info to K [i.e., Meli] . . . .”  

Company A’s Representations About the Use of Investor Money  

26. Company A raised at least approximately $2.7 million in net funds between 

approximately May 2017 and at least December 2017 from at least 12 investors, based on 

representations that the investors’ money would be used to purchase blocks of tickets to at least 

four different live events: Harry Potter and the Cursed Child on Broadway, Hello Dolly on 

Broadway, Bruce Springsteen on Broadway, and an August 2017 professional boxing match 

between Floyd Mayweather Jr. and Conor McGregor.   

27. In collecting investments from various individuals, Company A provided 

documentation that reflected the essential terms of the original investment pitch.  In some 

instances, the terms were set forth in “Funding Agreements.”  In other instances, following the 

formation of the Company A Investment Funds in August/September 2017, investors received 

private placement memoranda.   

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28. For example, on or about June 7, 2017, Company A’s CFO sent a Funding 

Agreement to Investor-1 via email.  Company A’s CFO represented to Investor-1, in pertinent 

part, “[a]s you know, Company A does not get paid any management fee on [the purported ticket 

deals] until tickets are sold and then the split is 90:10 in favour of the investor until 200% is 

returned to the investor.”     

29. The Funding Agreement specifically referred to Investor-1 as an “Investor” and 

made clear that Investor-1’s money would be used “to fund the purchase of [tickets] in exchange 

for a sharing of proceeds from the re-sale of the Tickets.”  Company A’s Funding Agreements, 

therefore, created investment contracts between Company A and its investors, including 

Investor-1. 

30. On or about June 8, 2017, Investor-1 executed two Funding Agreements and 

agreed to invest a total of $350,000 (investing $50,000 and $300,000 respectively).   

31. In the Funding Agreements, Company A represented that: 

a. “[Company A] is in the business of purchasing and reselling concert, sports, 

and theatrical tickets”; and  

b. “[Company A] is currently in discussions with representatives, ticket holders, 

and right’s [sic] holders of: World Class Intellectual Properties, Top 50 

Concert Touring Acts, and Mega Sporting Events.  The concert, sports and 

theatrical tickets are all together referred to as ‘The [Company A] Ticket 

Inventory.’”   

32. Company A also promised Investor-1 that Company A would only be entitled to 

use the $350,000 to “fund the purchase of [certain tickets] or selected segments of the [Company 

A] Ticket Inventory in exchange for a sharing of proceeds from the re-sale of the Tickets” and 

that “[Company A] . . . agree[d] to use invested funds to purchase at their sole discretion the 

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tickets identified in Exhibit A . . . .”  Exhibit A to Investor-1’s Funding Agreements identified 

two sets of tickets: Harry Potter and the Cursed Child and Hello Dolly.   

33. Siniscalchi knew, or was reckless in not knowing, that Company A promised to 

use investor money exclusively to purchase tickets, and knew, or was reckless in not knowing, 

that those promises were false. 

Siniscalchi Knowingly Misused Investor Funds 

34. Company A claimed to its investors that it had a unique pipeline to certain ticket 

inventories.  But, Company A did not purchase tickets directly.  Instead, Siniscalchi acted as an 

intermediary between Company A and the supposed ticket inventory.  In particular, Siniscalchi 

represented that he could buy tickets, directly or indirectly, and that after doing so he would sell 

those tickets to Company A.  This arrangement was typically memorialized in a contract (i.e., a 

“Letter Agreement”).   

35. In particular, each time Company A and an investor or group of investors 

executed (or was expected to execute) a Funding Agreement, Company A also entered into a 

corresponding Letter Agreement with Siniscalchi.  On their face, the Letter Agreements created 

an arrangement, in substance, wherein Company A agreed to purchase—and Siniscalchi agreed 

to sell to Company A—a specified number of tickets at a cost that correlated with investment 

amounts per the investors’ Funding Agreements.   

36. For example, on or about June 4, 2017, Company A entered into a Letter 

Agreement with a company called JJS Entertainment, LLC that corresponded with a Funding 

Agreement signed by Investor-1 in early June 2017.  The Letter Agreement stated, in pertinent 

part: “This Letter Agreement . . . is made by and between [COMPANY A] and JJS 

ENTERTAINMENT, LLC (‘Seller’) in order to facilitate [Company A]’s purchase of ‘Tickets’  

. . . from Seller for Broadway performances of ‘Harry Potter and the Cursed Child’ . . . . Seller 

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has title to, or the unconditional right to obtain, the Tickets free and clear of any claim, lien or 

encumbrance and has the unqualified right to sell them to [Company A].”   

37. Siniscalchi was the sole owner and control person of JJS Entertainment, LLC.  

Siniscalchi signed the June 4, 2017 Letter Agreement as JJS Entertainment, LLC’s Managing 

Member.   

38. Company A and JJS Entertainment, LLC entered into two similar Letter 

Agreements—with nearly identical language—on or about June 9, 2017, for the purchase of 

Hello Dolly tickets.  Like the June 4, 2017 Letter Agreement, the June 9, 2017 Letter 

Agreements corresponded with Funding Agreements signed by Investor-1 in early June 2017.   

39. Siniscalchi signed the June 9, 2017 Letter Agreements as JJS Entertainment, 

LLC’s Managing Member.   

40. Siniscalchi was the sole signatory on the JJS Entertainment, LLC bank account 

into which Company A transferred Investor-1’s money. 

41. As set forth in the Funding and Letter Agreements concerning Investor-1’s 

investment, Siniscalchi was obligated to use the monies invested by Investor-1 only to purchase 

specified tickets.  And, Siniscalchi knew, or was reckless in not knowing, that he was obligated 

to use Investor-1’s money (as was the case for all of Company A’s investors) exclusively to 

purchase tickets.  But, in actuality, and as the examples below illustrate, Siniscalchi knowingly 

or recklessly misused the vast majority of the Investor-1’s money, as well as money provided by 

other investors. 

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42. Overall, Siniscalchi, directly or indirectly, knowingly or recklessly misused the 

vast majority of the at least approximately $2.7 million net amount invested by at least 12 

investors with Company A between approximately May 2017 and at least December 2017.  

Siniscalchi misappropriated more than half of the investor funds raised by Company A for his 

benefit and the benefit of Meli and Meli’s family.  Siniscalchi misappropriated additional 

investor funds (a) to make payments to certain earlier investors in Ponzi-like fashion in order to 

conceal the fraud; and (b) to make payments to third parties who had no apparent connection to 

the ticket or entertainment industry.   

  

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FIRST CLAIM FOR RELIEF 
FRAUD IN THE OFFER OR SALE OF SECURITIES 

(Violations of Section 17(a) of the Securities Act) 
 

43. The Commission repeats and incorporates by reference the allegations in 

paragraphs 1-42 above. 

44. By reason of the conduct described above, the Defendant, in the offer or sale of 

securities, by the use of the means or instrumentalities of interstate commerce or of the mails, 

directly or indirectly, acting with the requisite degree of knowledge or state of mind (i) employed 

devices, schemes, or artifices to defraud; (ii) obtained money or property by means of any untrue 

statement of a material fact or any omission to state a material fact necessary in order to make 

the statements made, in the light of the circumstances under which they were made, not 

misleading; and (iii) engaged in transactions, practices, or courses of business which operated or 

would operate as a fraud or deceit upon any persons, including purchasers or sellers of the 

securities.  

45. By reason of the conduct described above, the Defendant violated Securities Act 

Section 17(a) [15 U.S.C. § 77q(a)]. 

SECOND CLAIM FOR RELIEF 
FRAUD IN CONNECTION WITH THE PURCHASE OR SALE OF SECURITIES 

(Violations of Section 10(b) of the Exchange Act and Rules 10b-5(a) and (c)) 
 
46. The Commission repeats and incorporates by reference the allegations in 

paragraphs 1-42 above. 

47. By reason of the conduct described above, the Defendant, directly or indirectly, in 

connection with the purchase or sale of securities, by the use of the means or instrumentalities of 

interstate commerce or of the mails, or of any facility of any national securities exchange, 

intentionally, knowingly or recklessly, (i) employed devices, schemes, or artifices to defraud; 

and (ii) engaged in acts, practices, or courses of business which operated or would operate as a 

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fraud or deceit upon any persons, including purchasers or sellers of the securities. 

48. By reason of the conduct described above, the Defendant violated Exchange Act 

Section 10(b) [15 U.S.C. § 78j(b)] and Rules 10b-5(a) and (c) [17 C.F.R. § 240.10b-5(a) and (c)] 

thereunder. 

PRAYER FOR RELIEF 

WHEREFORE, the Commission respectfully requests that this Court: 

A. Enter a permanent injunction restraining the Defendant and each of his officers, 

agents, servants, employees, attorneys, and those persons in active concert or participation with 

him who receive actual notice of the injunction by personal service or otherwise, including 

email, fax, or overnight delivery service, from directly or indirectly engaging in the conduct 

described above, or in conduct of similar purport and effect, in violation of:  

1. Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rules 10b-
5(a) and (c) thereunder [17 C.F.R. 240.10b-5(a) and (c)]; and 

2. Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)]. 

B. Order the Defendant to disgorge his ill-gotten gains, plus prejudgment interest; 

C. Order the Defendant to pay appropriate civil monetary penalties in accordance 

with Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the 

Exchange Act [15 U.S.C. § 78u(d)(3)];  

D. Retain jurisdiction over this action to implement and carry out the terms of all 

orders and decrees that may be entered; and 

E. Grant such other and further relief as this Court may deem just and proper. 

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JURY DEMAND 

The Commission demands a jury in this matter for all claims so triable.  

Dated: April 29, 2019   
 Boston, MA   Respectfully submitted, 

    SECURITIES AND EXCHANGE COMMISSION 

 
 

By its attorneys, 
 

     /s/ Alicia M. Reed 
Alicia M. Reed (NY Bar # 4913596) 
Dahlia Rin* (MA Bar # 674137) 
Eric A. Forni* (MA Bar # 669685) 
Martin F. Healey* (MA Bar # 227550) 
U.S. Securities and Exchange Commission 
Boston Regional Office 
33 Arch St., 24th Floor 
Boston, MA 02110 
(617) 573-8827 (Forni) 
[email protected] 
 
*Not admitted in the S.D.N.Y. 

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