SEC v. Max Infinity Management LLC; Max Infinity Venture Partners, Inc.; Elder Fund Management LLC; JJRP United Corp; Grand Level Consulting Inc.; John S. Cangialosi, Jr., et al., No. 1:25-cv-00549, Eastern District of New York (Jan. 31, 2025) — Complaint

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK

 No. 1:25-cv-549

 COMPLAINT

Plaintiff Securities and Exchange Commission (“Commission” or “SEC”), for its
Complaint against Max Infinity Management LLC d/b/a Max Infinity Fund (“Max Infinity
Management”), Max Infinity Venture Partners, Inc. (“Max Infinity Venture Partners”), Elder
Fund Management LLC (“Elder Fund Management”), JJRP United Corp (“JJRP”), Grand Level

SECURITIES AND EXCHANGE
COMMISSION,

                                   Plaintiff,
        v.

MAX INFINITY MANAGEMENT LLC
D/B/A MAX INFINITY FUND, MAX
INFINITY VENTURE PARTNERS, INC.,
ELDER FUND MANAGEMENT LLC,
JJRP UNITED CORP, GRAND LEVEL
CONSULTING INC.,

                                   Entity Defendants,

JOHN S. CANGIALOSI, JR., PETER N.
GIRGIS, GENE “JERRY” SARABELLA,
ENRICO A. “ED” CARINI, CANER “JOHN”
OTAR, CHESTER E. “CHETT” SCOTLAND,
and FRANZ H. LAMBERT II,

                                   Individual Defendants,

JCANG1 CORP., GIRGIS CONSULTING,
INC., OCTOBER UNITED MARKETING
INC., UNDER PAR CONSULTING INC.,
PUT THEM ON THE BOOKS MARKETING
INC., PERFECT PERFECTION, LTD.,
SCOTLAND OMEGA LTD, and FRANZ &
ANTHONY HOLDINGS CORP.,

                                   Relief Defendants.

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Consulting Inc. (“Grand Level”), John S. Cangialosi, Jr. (“Cangialosi”), Peter N. Girgis
(“Girgis”), Gene “Jerry” Sarabella (“Sarabella”), Enrico A. “Ed” Carini (“Carini”), Caner “John”
Otar (“Otar”), Chester E. “Chett” Scotland (“Scotland”), and Franz H. Lambert II (“Lambert”)
(collectively, “Defendants”), and Relief Defendants JCang1 Corp., Girgis Consulting, Inc.,
October United Marketing Inc., Under Par Consulting Inc., Put Them on the Books Marketing
Inc., Perfect Perfection, Ltd., Scotland Omega Ltd., and Franz & Anthony Holdings Corp.
(collectively, “Relief Defendants”), alleges as follows:
SUMMARY
1. From at least July 2021 to April 2023 (the “Relevant Period”), Defendants
engaged in a scheme to defraud investors and prospective investors using boiler room-style high
pressure sales tactics, false and misleading statements, and other means of trickery and deception
to offer and sell investment fund interests purportedly representing shares of stock in private
companies that had not yet held an initial public offering (referred to as “pre-IPO stock”).  The
investments were offered in the names of two related funds, Max Infinity Fund and Elder Fund
(defined in paragraphs 33 and 34).  Through the conduct of each Defendant, which violated the
antifraud, securities registration, and broker-dealer registration provisions of the federal
securities laws, the scheme raised over $70 million from more than 550 investors throughout the
United States.
2. The scheme was orchestrated and controlled during the Relevant Period by
Defendants Cangialosi, Girgis, and Sarabella (the “Max Principals”).  Cangialosi and Girgis are
veterans in the securities industry each with a history of disciplinary proceedings.  Both were
suspended by the Financial Industry Regulatory Authority (“FINRA”) during a portion of the
Relevant Period and now are permanently barred by FINRA.  But their control of the investment

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funds’ operations was largely hidden from investors, while Sarabella, the third principal of the
scheme, having virtually no experience in financial services, was held out publicly as the
investment funds’ owner, organizer, adviser, and, at times, manager.
3. The Max Principals operated the fraudulent scheme through a variety of entities,
including Defendants Max Infinity Management, Max Infinity Venture Partners, and Elder Fund
Management (collectively, the “Max and Elder Entities”) and two entities that operated boiler
rooms, Defendants JJRP and Grand Level.  Defendant Lambert owned Grand Level but
established it at the direction of, and controlled it jointly with, the Max Principals.  Defendant
Scotland, who had no experience in fund management, was held out publicly as the “manager”
of most of the investment funds.
4. The Max Principals hired and trained a workforce of unregistered sales agents,
including Defendants Carini and Otar, to cold call and pitch pre-IPO stock to thousands of
prospective investors, many of them senior citizens, using canned scripts and rebuttals that were
riddled with false and misleading statements and deceptive devices such as fake names,
fabricated credentials and successes, and spoofed telephone numbers.  Defendants Carini and
Otar made false and misleading statements to investors and were each in charge of a team of
other sales agents who pitched investors.
5. Over the phone, through email, and in the funds’ offering documents, and while
portraying themselves as private equity experts working for a Commission-registered fund,
Defendants and the sales agents that they trained and managed routinely conveyed to prospective
investors that the pre-IPO stock that was purportedly held in their funds would return quick
profits of 200% or more, involved no upfront fees, entailed little to no risk, and would be
shielded from market volatility.  Defendants and their workforce of sales agents also represented

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to investors that their funds had an impressive track record of success in previously
recommending pre-IPO stock, that the pre-IPO stock w as “in house” at the funds, and that
investors’ proceeds would be held in an escrow account until the pre-IPO company went public.
None of this was true.
6. In reality, the funds, formed in July 2021, were not registered with the
Commission, had no track record of success, and were organized, advised, and managed by
individuals with no expertise in investment fund management.  The funds did not hold investor
proceeds in escrow, investments w ere not shielded from market volatility, and Defendants had
no reasonable basis for representing to investors that they could expect substantial short-term
profits with little or no risk.  In many instances, Defendants sold investors shares of pre-IPO
stock that were not “in house,” but instead the Max Principals had acquired an interest in an
unaffiliated fund purporting to have pre-IPO stock but which also was not registered with the
Commission.
7. Despite telling investors that there were no upfront fees or commissions,
Defendants sold interests in pre-IPO stock at a price secretly marked-up by 45% to over 100%
above the price that the Max and Elder Entities paid to acquire the purported shares, securing
immediate, substantial profits for themselves, while increasing the risk that investors would incur
substantial losses.  Defendants used these undisclosed charges to pay sizable and undisclosed
commissions to their sales agents, as well as to fund bank accounts held in the name of the Relief
Defendants, from which monies were then withdrawn for personal expenses, including (in the
case of some Defendants) to buy cars and jewelry and take expensive vacations.
8. To date, only one pre-IPO company at issue has gone public, and this event
resulted in substantial financial losses for fund investors.  Neither Defendants, nor the offer and

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sale of fund interests, were registered with the Commission or eligible for an exemption from
registration during the Relevant Period.
9. By virtue of the conduct alleged herein, Defendants have violated, and/or aided
and abetted violations of, Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 (“Securities
Act”) [15 U.S.C. §§ 77e(a), 77e(c), and 77q(a)], Sections 10(b) and 15(a) of the Securities
Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. §§ 78j(b) and 78o(a)] and Rule 10b-5
thereunder [17 C.F.R. § 240.10b-5], and Sections 206(1), 206(2), and 206(4) of the Investment
Advisers Act of 1940 (“Advisers Act”) [15 U.S.C. §§ 80b-6(1), (2), and (4)] and Rule 206(4)-8
thereunder [17 C.F.R. § 275.206(4)-8].  Also, each of the Max Principals is liable as a control
person under Section 20(a) of the Exchange Act [15 U.S.C. § 78t(a)] for violations by the Max
and Elder Entities, JJRP, and Grand Level of Exchange Act Section 10(b), Rule 10b-5, and
Section 15(a)(1); and Lambert is liable as a control person under Exchange Act Section 20(a) for
violations by Grand Level of Exchange Act Section 10(b), Rule 10b-5, and Section 15(a)(1).
10. The Commission seeks a final judgment: (a) permanently enjoining Defendants
from violating the federal securities laws and rules this Complaint alleges they violated; (b)
ordering Defendants to disgorge the ill-gotten gains they received as a result of their violations
and to pay prejudgment interest thereon; (c) ordering Defendants to pay civil money penalties for
their violations; (d) entering appropriate conduct-based injunctions against Defendants
Cangialosi, Girgis, Sarabella, Carini, Otar, Scotland, and Lambert; (e) entering an order barring
Defendants Cangialosi, Girgis, and Sarabella from serving as an officer or director of a public
issuer; (f) ordering the Relief Defendants, each of which is owned or controlled by an individual
defendant, to disgorge the ill-gotten gains they received as a result of Defendants’ violations and

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to pay prejudgment interest thereon; and (g) ordering any other and further relief the Court may
deem just and proper.
JURISDICTION AND VENUE
11. The Commission brings this action, and the Court has subject matter jurisdiction
over this action, under Securities Act Sections 20(a) and (d) and 22(a) [15 U.S.C. §§ 77t(a) and
(d), and 77v(a)]; Exchange Act Sections 21(d) and 27(a) [15 U.S.C. §§ 78u(d) and 78aa(a)]; and
Advisers Act Sections 209(d) and (e) and 214(a) [15 U.S.C. §§ 80b-9(d) and (e), and 80b-14(a)].
12. Venue is proper in this District under Securities Act Section 22(a) [15 U.S.C. §
77v(a)], Exchange Act Section 27(a) [15 U.S.C. § 78aa(a)], and Advisers Act Section 214(a) [15
U.S.C. § 80b-14(a)] because certain of the acts or transactions constituting violations of the
federal securities laws, including offers and sales to certain investors, occurred in this District
and because Defendants are found, inhabit, or transact business in this District.  Among other
things, several of the individual defendants reside in either Kings County, Richmond County, or
Queens County, each within this District.  Additionally, defendant Grand Level and many of the
relief defendants have their primary corporate address in this District.  During the Relevant
Period, prospective investors residing here were solicited by one or more of the Defendants, and
emails, mailings, and sales pitches were delivered to the investors in this District.
DEFENDANTS
13. Max Infinity Management LLC d/b/a Max Infinity Fund (“Max Infinity
Management”), is a New York limited liability company formed on or about May 5, 2021.  On
January 20, 2022, Max Infinity Management filed a “Certificate of Assumed Name” to do
business as “Max Infinity Fund.”  Fund investors were generally directed to deposit funds into
accounts in the name of Max Infinity Management, and Max Infinity Management was one of

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the two entities that acquired interests in pre-IPO stock or interests in funds that purported to
hold interests in pre-IPO stock.  Sarabella is the sole legal owner and managing member of Max
Infinity Management and is the “authorized signer” on its bank accounts, but Max Infinity
Management is beneficially owned and controlled jointly by the Max Principals.  Max Infinity
Management has never been registered with the Commission in any capacity.
14. Max Infinity Venture Partners, Inc. (“Max Infinity Venture Partners”) is a
New Jersey corporation formed on or about April 8, 2022.  Sarabella is its sole legal owner, but
Max Infinity Venture Partners is beneficially owned and controlled jointly by the Max
Principals.  Max Infinity Venture Partners was one of the two entities that acquired interests in
pre-IPO stock or interests in funds that purported to hold interests in pre-IPO stock.  Max Infinity
Venture Partners has never been registered with the Commission in any capacity.
15. Elder Fund Management LLC (“Elder Fund Management”) is a Delaware
limited liability company formed on or about October 14, 2022, and organized by Sarabella, but
jointly owned by Cangialosi (40%), Girgis (40%), and Sarabella (20%) and jointly controlled by
them.  Sarabella is the CEO and managing member of Elder Fund Management and the
“authorized signer” on its bank accounts.  Elder Fund Management was occasionally identified
as the “manager” of one of the Elder Funds (Elder 1).  Elder Fund Management also was
identified as the administrative manager of certain of the Elder Funds.  Elder Fund Management
has never been registered with the Commission in any capacity.
16. JJRP United Corp (“JJRP”) is a New York corporation formed on or about
February 5, 2020.  Its primary business address is in New York, New York, and Sarabella is its
legal owner and President, but it is beneficially owned and controlled jointly by the Max
Principals.  From at least August 2021 to August 2022, JJRP was the entity through which the

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Max Principals operated a boiler room to solicit investors for the Max Infinity Funds and paid
unregistered sales agents transaction-based compensation.  JJRP has never been registered with
the Commission in any capacity.
17. Grand Level Consulting Inc. (“Grand Level”) is a New York corporation
formed on or about June 3, 2022.  Its business address is in Freeport, New York.  Grand Level is
legally owned by Lambert as its sole shareholder but during the Relevant Period was functionally
controlled in whole or in part by the Max Principals.  From about August 2022 to about April
2023, Grand Level was the entity through which the Max Principals operated a boiler room out
of New York, New York, to solicit investors for the Max Infinity and Elder Funds and paid
unregistered sales agents transaction-based compensation.  Grand Level has never been
registered with the Commission in any capacity.
18. John S. Cangialosi, Jr. (“Cangialosi”), age 43, resides in Manalapan, New
Jersey.  Cangialosi is one of the Max Principals.  He beneficially co-owns Max Infinity
Management and Max Infinity Venture Partners, and is a legal owner of Elder Fund
Management, with Girgis and Sarabella.  He also owns Relief Defendant JCang1 Corp.
Cangialosi held licenses in the securities industry for over 23 years.  His FINRA Central
Registration Depository (“CRD”) number is 3273830.  From 2001 to 2022, Cangialosi was a
registered representative associated with eight registered broker-dealers, four of which have been
expelled by FINRA.  Cangialosi’s regulatory record includes multiple disclosed customer
disputes, two suspensions by FINRA, and agreements with two state regulators that prevent him
from future registration in those states.  One of Cangialosi’s FINRA suspensions extended from
September 7, 2021 to June 6, 2022, during the Relevant Period.  On March 6, 2024, Cangialosi
consented to an indefinite FINRA bar in all capacities for refusing to appear for on-the-record

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testimony requested by FINRA in connection with its examination of Cangialosi’s outside
business activities.  Cangialosi has been indicted in this District on conduct substantially
overlapping the conduct alleged by this Complaint.  See US v. Cangialosi, et al., Case No. 24-
CR-363 (E.D.N.Y. Sept. 10, 2024) (indicting Cangialosi, Girgis, Sarabella, Carini, and Otar on
conspiracy to commit securities fraud, conspiracy to commit wire fraud, securities fraud,
investment adviser fraud, and money laundering conspiracy) (the “Criminal Action”).
19. Peter N. Girgis (“Girgis”), age 43, resides in Staten Island, New York.  Girgis is
one of the Max Principals.  He beneficially co-owns Max Infinity Management and Max Infinity
Venture Partners, and is a legal owner of Elder Fund Management, with Cangialosi and
Sarabella.  He also owns Relief Defendant Girgis Consulting.  Girgis, CRD Number 4520444,
held licenses in the securities industry for approximately 20 years.  From 2002 until 2022, Girgis
was associated with eight different registered broker-dealers, four of which have been expelled
by FINRA.  Girgis is permanently barred from registering in any capacity in the securities
industry in the state of Illinois.  Girgis’s record includes multiple disclosed customer complaints
and FINRA suspensions on three separate occasions, including from January 3, 2022 to October
2, 2022, during the Relevant Period.  On October 7, 2024, Girgis was barred indefinitely and in
all capacities by FINRA for failing to respond to its requests for information.  Girgis has been
indicted in the Criminal Action in this District.
20. Gene “Jerry” Sarabella (“Sarabella”), age 37, resides in Monroe, New Jersey.
Sarabella is one of the Max Principals.  He is the sole legal owner of Max Infinity Management,
Max Infinity Venture Partners, and JJRP, but he shares beneficial co-ownership of those entities
with Cangialosi and Girgis.  Sarabella is a co-owner of Elder Fund Management with Cangialosi
and Girgis.  Sarabella has never been licensed in any capacity in the securities industry.  With

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respect to Max Infinity Fund, which was organized while two of the Max Principals were
suspended by FINRA, Sarabella was held out as the “owner” of the fund, as well as its sole
member, CEO, President.  In the Max Infinity and Elder Fund securities offering documents,
Sarabella is identified as the organizer and advisor of the funds and on some occasions as the
funds’ manager.  Sarabella owns Relief Defendants October United Marketing and Under Par
Consulting.  Sarabella has been indicted in the Criminal Action in this District.
21. Enrico A. “Ed” Carini (“Carini”), age 39, resides in Staten Island, New York.
Carini has never held any licenses in the securities industry.  During the Relevant Period, Carini
was a sales agent for Max Infinity Fund and Elder Fund and also was in charge of a team of other
sales agents.  He is the sole owner of Relief Defendant Put Them on the Books Marketing
through which he received transaction-based compensation in the form of commissions from
JJRP and Grand Level.  Carini has been indicted in the Criminal Action in this District.
22. Caner “John” Otar (“Otar”), age 38, resides in Brooklyn, New York.  From
2011 to 2018, Otar, CRD Number 5628513, was a registered representative associated with six
broker-dealers registered with the Commission, three of which have been expelled by FINRA.
In 2015, the Florida Office of Financial Regulation denied Otar’s registration on the grounds of a
materially false statement on his application.  From about August 2021 to about November 2022,
Otar was a Max Infinity Fund sales agent and also was in charge of a team of other sales agents.
Otar owns and/or controls Relief Defendant Perfect Perfection through which he received
transaction-based compensation in the form of commissions from JJRP and Grand Level.  Otar
has been indicted in the Criminal Action in this District.
23. Chester E. “Chett” Scotland (“Scotland”), age 55, resides in Bronx, New York.
Scotland, CRD Number 2858846, has been licensed in the securities industry since 2000.  From

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2000 to 2002, and again from 2019 to 2020, Scotland was associated with registered broker-
dealers.  The two registered broker-dealers with which Scotland was associated in 2019 and 2020
have been expelled by FINRA.  During the Relevant Period, Scotland was a sales agent for Max
Infinity Fund, and he also is identified as the purported “manager” of most of the Max Infinity
and Elder Funds.  Since May of 2024, Scotland has been associated with a registered broker-
dealer.  Scotland owns and/or controls Relief Defendant Scotland Omega through which
Scotland received transaction-based compensation in the form of commissions from JJRP and
Grand Level.
24. Franz H. Lambert II (“Lambert”), age 48, resides in Queens, New York.  He is
the legal owner of Grand Level.  Lambert, CRD Number 4463792, held securities licenses for
over 20 years.  From 2002 until 2021, Lambert was associated with sixteen registered broker-
dealers, six of which have been expelled by FINRA.  Lambert was suspended by FINRA from
July 18 to December 17, 2022, during the Relevant Period, and while operating Grand Level.
During the Relevant Period, he was a sales agent who sold interests in the Max Infinity and Elder
Funds.  He owns or controls Relief Defendant Franz & Anthony, through which he received
transaction-based compensation in the form of commissions from JJRP and Grand Level.
RELIEF DEFENDANTS
25. JCang1 Corp. (“JCang1”) is a New Jersey corporation formed on or about May
5, 2021.  Cangialosi is its owner and President.  During the Relevant Period, JCang1 received
funds that were sourced from principal invested by Max Infinity and Elder Fund investors, but it
does not have a legitimate claim to those funds.  JCang1 does not appear to have operations and,
therefore, appears to be a shell company that, during the Relevant Period, functioned primarily to
receive ill-gotten gains.

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26. Girgis Consulting, Inc. (“Girgis Consulting”) is a New York corporation
formed on or about August 30, 2019.  Girgis Consulting’s primary address is in Staten Island,
New York.  Girgis Consulting is owned and controlled by Girgis, who is its President.  During
the Relevant Period, Girgis Consulting received funds that were sourced from principal invested
by Max Infinity and Elder Fund investors, but it does not have a legitimate claim to those funds.
Girgis Consulting does not appear to have operations and, therefore,  appears to be a shell
company that, during the Relevant Period, functioned primarily to receive ill-gotten gains.
27. October United Marketing Inc. (“October United”) is a New York corporation
formed on or about October 20, 2021.  October United’s primary address is in New York, New
York.  October United is owned and controlled by Sarabella, who is its President.  During the
Relevant Period, October United received funds that were sourced from principal invested by
Max Infinity and Elder Fund investors, but it does not have a legitimate claim to those funds.
October United does not appear to have operations and, therefore,  appears to be a shell company
that, during the Relevant Period, functioned primarily to receive ill-gotten gains.
28. Under Par Consulting Inc. (“Under Par”) is a New York corporation formed
on or about April 8, 2022.  Under Par is owned and controlled by Sarabella.  During the Relevant
Period, Under Par received funds that were sourced from principal invested by Max Infinity and
Elder Fund investors, but it does not have a legitimate claim to those funds.  Under Par does not
appear to have operations and, therefore,  appears to be a shell company that, during the Relevant
Period, functioned primarily to receive ill-gotten gains.
29. Put Them on the Books Marketing Inc. (“PTOTB”) is a New York corporation
formed on or about March 31, 2021.  PTOTB’s primary address is in Staten Island, New York.
PTOTB is owned and controlled by Carini, who is its President and sole shareholder.  During the

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Relevant Period, PTOTB received funds that were sourced from principal invested by Max
Infinity and Elder Fund investors, but it does not have a legitimate claim to those funds.  PTOTB
does not appear to have operations and, therefore, appears to be a shell company that, during the
Relevant Period, functioned primarily to receive ill-gotten gains.
30. Perfect Perfection, Ltd. (“Perfect Perfection”) is a New York corporation
formed on or about January 25, 2018.  Perfect Perfection’s primary address is in Brooklyn, New
York.  Perfect Perfection is owned and controlled, in whole or in part, by Otar.  During the
Relevant Period, Perfect Perfection received funds that were sourced from principal invested by
Max Infinity and Elder Fund investors, but it does not have a legitimate claim to those funds.
Perfect Perfection does not appear to have operations and, therefore,  appears to be a shell
company that, during the Relevant Period, functioned primarily to receive ill-gotten gains.
31. Scotland Omega Ltd. (“Scotland Omega”) is a New York corporation formed
on or about October 20, 2021.  Scotland Omega’s primary address is in Bronx, New York.
Scotland Omega is owned and controlled, in whole or in part, by Scotland.  During the Relevant
Period, Scotland Omega received funds that were sourced from principal invested by Max
Infinity and Elder Fund investors, but it does not have a legitimate claim to those funds.
Scotland Omega does not appear to have operations and, therefore, appears to be a shell
company that, during the Relevant Period, functioned primarily to receive ill-gotten gains.
32. Franz & Anthony Holdings Corp. (“Franz & Anthony”) is a New York
corporation formed on or about October 3, 2018.  Its primary address is in Forest Hills, New
York.  Franz & Anthony is owned and controlled, in whole or in part, by Lambert.  During the
Relevant Period, Franz & Anthony received funds that were sourced from principal invested by
Max Infinity and Elder Fund investors, but it does not have a legitimate claim to those funds.

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Franz & Anthony does not appear to have operations and, therefore,  appears to be a shell
company that, during the Relevant Period, functioned primarily to receive ill-gotten gains.
OTHER RELEVANT ENTITIES
33. Max Infinity Fund, LLC (“Max Infinity Fund”) is a Delaware limited liability
company, and during the Relevant Period, operated out of office space in New York, New York.
Max Infinity Fund was formed on or about July 27, 2021, at or near the time that Cangialosi and
Girgis each consented to suspensions by FINRA.  Sarabella is and was held out as the President
and purported “owner” of Max Infinity Fund, but at least during the Relevant Period, it was
jointly controlled and beneficially owned by the Max Principals, each sharing in the proceeds
from fund investors.  Max Infinity Fund is a master limited liability company that has ten
“series” (Max 1, Max 1A, Max 1B, Max 2, 3, 4, 5, 6, 7, and 8).  Max Infinity Fund issued
securities in the form of limited liability company membership interests, but neither the fund, nor
any of its securities offerings, has been registered with the Commission in any capacity.  Max
Infinity Fund offering documents claim its membership interests are exempt from registration
under Section 4(a)(2) of the Securities Act and Regulation D and Section 3(c)(1) or 3(c)(7) of the
Investment Company Act of 1940 (the “Investment Company Act”).  But Max Infinity Fund has
not filed a Form D or any other forms or registration documents with the Commission, although
it filed for access to the Commission’s electronic data gathering, analysis, and retrieval
(“EDGAR”) system and received central index key (“CIK”) numbers for all of its series, except
Max 8.  CIK is a unique number the Commission assigns to entities with access to EDGAR.
34. Elder Fund, LLC (“Elder Fund”) is a Delaware limited liability company, and
during the Relevant Period, operated out of office space in New York, New York.  It was formed
on or about October 11, 2022, nine days following the conclusion of Girgis’s FINRA suspension.

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Sarabella is Elder Fund’s CEO, managing member and “authorized signer” on its bank accounts,
but at least during the Relevant Period, Elder Fund was jointly controlled and beneficially owned
by the Max Principals, each sharing in the proceeds from fund investors.  Elder Fund is a master
limited liability company that has three “series” (Elder 1, 2, and 3).  Elder Fund issued securities
in the form of limited liability company membership interests, but it is not registered with the
Commission in any capacity.  Elder Fund offering documents claim its membership interests are
exempt from registration under Section 4(a)(2) of the Securities Act and Regulation D and
Section 3(c)(1) of the Investment Company Act.  But Elder Fund has not filed a Form D or any
other forms or registration documents with the Commission, although it filed for EDGAR access
and received a CIK number for Elder 1.
FACTS
I. THE SECURITIES OFFERINGS
35. During the Relevant Period, each Defendant directly and/or indirectly offered and
sold securities in the form of membership interests in ten Max Infinity Funds and three Elder
Funds, each styled as a  “series” of a master fund organized as a limited liability company, raising
approximately $70 million from over 550 investors throughout the United States.  In so doing,
each Defendant used means of interstate communication or commerce, including emails,
telephone calls, and mailings.
36. Elder Fund, which was formed in the fall of 2022 shortly after the conclusion of
Girgis’s FINRA suspension, was an extension of Max Infinity Fund, but under a new name.
37. Each fund purported to hold a beneficial interest --  through an “affiliate” of the
company -- in pre-IPO stock of a single private company.

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38. The ten Max Infinity Fund series are: MAX 1, a Series of Max Infinity Fund,
LLC; MAX 1A, a Series of Max Infinity Fund, LLC; MAX1B, a Series of Max Infinity Fund,
LLC; MAX 2, a Series of Max Infinity Fund, LLC; MAX 3, a Series of Max Infinity Fund, LLC;
MAX 4, a Series of Max Infinity Fund, LLC; MAX 5, a Series of Max Infinity Fund, LLC;
MAX 6, a Series of Max Infinity Fund, LLC; MAX 7, a Series of Max Infinity Fund, LLC; and
MAX 8, a Series of Max Infinity Fund, LLC.
39. The three Elder Fund series are: ELDER 1, a Series of ELDER FUND, LLC;
ELDER 2, a Series of ELDER FUND, LLC; and ELDER 3, a Series of ELDER FUND, LLC.
40. Max Infinity Fund investors were directed to deposit funds into separate bank
accounts designated for each fund, but with checks written out to or wires directed to Max
Infinity Management.  Investors in Elder Fund were directed to deposit funds into separate bank
accounts designated for each fund, but with all checks written out to or wires directed to
accounts in the name of the Elder Fund, not the individual fund series.
41. Once an investor deposited principal to invest in a Max Infinity or Elder Fund, the
investor’s principal was transferred routinely to, and comingled in, one or more bank accounts
owned by the Max and Elder Entities and controlled by the Max Principals.
42. The Max Principals used some of the investors’ principal to purchase purported
interests in pre-IPO shares or interests in other funds that purport to hold interests in pre-IPO
shares.  The Max Principals also transferred a portion of investor principal from the Max and
Elder Entities’ bank accounts to JJRP and Grand Level to pay substantial commissions to
unregistered sales agents.  The remainder was largely misappropriated by the Max Principals,
funneled through one or more of the Relief Defendants affiliated with each of the Max
Principals, and spent on cars, jewelry, and luxury vacations, among other expenditures.

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A. The Offering Documents
43. In connection with an investment, Max Infinity and Elder Fund investors typically
received five offering documents: (1) a Private Placement Memorandum (“PPM”); (2) a Limited
Liability Company Agreement/Operating Agreement (“LLOA”) (including an investment
advisory agreement); (3) a Subscription Agreement; (4) a Supplement (a single page that
purports to supplement/amend/supersede the PPM, LLOA and Subscription Agreement with,
among other things, defined terms); and (5) a Welcome Letter (a single page that, among other
things, states that the fund holds shares indirectly through an affiliate, discusses fees,  and states
that none have been deducted) (collectively, the “Offering Documents”).
44. The Offering Documents totaled more than one hundred pages and were largely
boilerplate in their substance.  These documents state that there are no “management fees” but
that the fund is entitled to “carried interest” in the amount of 20% (or less, as negotiated by
certain investors) of the investors’ profits after an IPO.
45. The Offering Documents identify Sarabella as the fund’s organizer,  advisor, and,
at times, manager, but Sarabella had no experience in any of those roles.
46. Although most of the Offering Documents identify Scotland as the fund’s
manager, Scotland also had no experience as a fund manager and frequently acted at the
direction of the Max Principals.  Scotland was paid a recurring payment in exchange for his
services as fund manager.
47. Upon occasion, certain Elder Fund Offering Documents identify Elder Fund
Management, which was jointly owned by the Max Principals and formed following the end of
Girgis’s FINRA suspension, as the fund manager.

18

48. Sarabella’s purported role as the fund organizer, advisor, and, at times, manager,
and Scotland’s purported role as the fund manager, concealed from investors the management
and control of the funds by Cangialosi and Girgis, who had prior FINRA and state suspensions in
the securities industry.
B. Purported Share Acquisition
49. The Max Infinity and Elder Funds did not directly purchase pre-IPO stock or
interests in pre-IPO stock.  Rather, the Max Principals, acting through the Max and Elder
Entities, acquired interests in pre-IPO stock or purported interests in pre-IPO stock in the name
of Max Infinity Management and Max Infinity Venture Partners.  The Max Principals advised
the Max Infinity and Elder Funds on which pre-IPO shares to purchase, where to purchase the
pre-IPO shares, and at what price.
50. For the first five series of the Max Infinity Funds, interests in the funds often were
sold before any purported interest in pre-IPO stock was acquired, despite the Defendants’ and
their sales agents’ repeated representations to investors that the stock was held “in house.”
51. Many of the pre-IPO shares for the first five series of the Max Infinity Funds were
acquired by Max Infinity Management purchasing fund interests issued by other unregistered
funds.
1

52. At times, Max Infinity Management and Max Infinity Venture Partners acquired
contractual rights to pre-IPO stock from current or former employees of the pre-IPO companies,
although those arrangements were often subject to contractual transfer restrictions that could
prevent the immediate delivery of shares to the funds or investors.

1
Some of these unregistered funds are currently subject to a federal court action by the Commission. See SEC v. The
Pre-IPO Marketplace Inc., et al., 1:24-cv-6886 (E.D.N.Y. Sept. 30, 2024).

19

 C. Hidden Fees Charged to Investors
53. As scripted by the Defendants, sales agents told investors that the Max Infinity
and Elder Funds made money only after the investor made money and that the fund made money
in the form of “carried interest,” usually equal to 20% (or less as negotiated by some investors)
of the investor’s profits alone (not the principal invested).
54. This was false.  The primary means by which the Max Infinity and Elder Funds
made money was through substantial, undisclosed markups on the acquisition price of the
purported interest in pre-IPO stock.  Max Infinity Management and Max Infinity Venture
Partners marked up the price it paid (or would pay) to purchase the stock (or interest in funds that
purported to hold stock) in amounts that generally ranged from 45% to over 100%.
55. Within the approximately $70 million raised from investors, investors were
secretly charged approximately $30.9 million in markups:
Pre-IPO Stock Price Paid by
Max Infinity
Management or
Max Infinity
Venture
Partners
(Including Fees)
Price Paid by
Investors to
Acquire Fund
Interests
Markup Range Average Markup
Company A $2.29 $4.00 75% 75%
Company B $30.90-$46.80 $77 65-149% 107%
Company C $11.81-$15.34 $25-30 63-147% 93%
Company D $43.26-$52.53 $90 71-108% 87%
Company E $58 $85 47% 47%
Company F $3.64 $6.50 79% 79%
Company G $63-$95 $130-$140 45%-122% 73%
Company H $28 $47.50 70% 70%

56. Over $11 million of these charges was misappropriated by the Max Principals for
their personal use; approximately $6.8 million of these charges was used to pay substantial

20

commissions to the sales agents; and approximately $2.9 million of these charges was used to
buy luxury goods such as jewelry and watches.
II. THE FRAUDULENT SCHEME
A. Boiler Room Training and High Pressure Sales Tactics
57. From office space in New York, New York, the Max Principals (acting through
JJRP and Grand Level) operated their boiler room-style sales floor in which sales agents cold
called prospective (often elderly) investors from lists that the Max Principals purchased from
third parties.
58. The Max Principals ran morning meeting training sessions on high pressure sales
tactics, which included talking points, role play, and rebuttals if investors resisted sales pitches.
59. Cangialosi and Girgis taught the sales agents that they are “actors,” and schooled
the agents on how to create urgency, mislead investors about risk, and fabricate expected profits.
Sarabella and Lambert attended these training sessions and affirmed and reinforced the lessons.
60. The Max Principals also provided sales agents with written sales pitches, scripts,
and rebuttals to aid their deception.  The written pitch for one pre-IPO company, for example,
introduced investors to the “most anticipated IPO of 2021” for which Max Infinity Fund had a
“very limited allocation of the stock at a 1.5 billion dollar valuation which translates to $4 per
share,” and misleadingly asserted that “GoldmanSacks [sic] is set to bring them public in the
fourth quarter of 2021 at a 6-10 billion valuation putting the stock on opening tick anywhere
between $16-$20 per share.”  The pitch continued that, “[b]ased on Goldmansacks [sic] IPO
valuation, your $100,000 investment would be worth $350,000 on the opening tick.”  The Max
Principals drafted and disseminated similar scripts for the other pre-IPO stocks that the
Defendants purported to sell.

21

61. Cangialosi drafted a written set of rebuttals for the sales agents to use when a
prospective investor expressed doubts or concerns about an investment.  These rebuttals included
talking points with false statements related to prior successes, including making 300% for other
investors, and offered false promises of risk mitigation.  In addition, the rebuttals encouraged
investors with real estate to borrow against the property to invest in pre-IPO stock, which the
rebuttals misleadingly characterize as offered at a “deep discount to the IPO price.”  Lambert
circulated and distributed these rebuttals to the unregistered sales agents at Grand Level.
62. Using the training provided by the Max Principals and Lambert, sales agents
relentlessly pursued investors.  Sales agents used phone number “spoofing” to hide their
identities and trick investors attempting to screen their calls.  Sales agents also used aliases to
hide their identities.  For example, Carini often used a fictious name, such as “Richard Oliveri,”
or the name of other sales agents, and Cangialosi and Girgis had a practice of using Sarabella’s
name when speaking to investors.
63. Sales agents, as trained, also often created false urgency by telling investors that
time was running out to buy into the firm’s supposed limited supply of pre-IPO shares.  Through
these and similar tactics, sales agents pushed and pressured investors, often aggressively, to
invest.
B. Fraudulent Misrepresentations and Omissions
64. During calls with investors and prospective investors, the Max Principals and the
sales agents, including Carini, Otar and Scotland,  and sales agents acting under the direction of
Lambert, made false and misleading statements about quick and large profits, little or no risk,
SEC registration and oversight, no upfront commissions or fees, “in house” shares, the fund’s
track record of success, and/or low volatility.

22

65. The Max Principals and the sales agents, including Carini, Otar, Scotland, and
Lambert, knew or were reckless in not knowing, that these statements were false or misleading.
1. False Statements Regarding Commissions and Hidden Fees

66. Sales agents acting under the control and direction of the Max Principals
repeatedly misrepresented to investors how they were paid and the fees associated with the
investment.  In particular, sales agents denied receiving any upfront commissions, and instead
falsely represented to investors that they were only paid after the investor made a profit.
67. Sales agents and the Max Principals knew, or were reckless in not knowing, that
these statements were false or misleading because the sales agents received, and the Max
Principals received and also paid the sales agents, transaction-based commission payments, often
ranging from 8% to over 20%, calculated on the principal invested.
68. The purported compensation structure, where sales agents supposedly received no
upfront commissions and only got paid when the investors made profits, was emphasized to
investors as important because it aligned the investor’s interest with the interests of the fund and
its sales agents.  For example, on or about November 16, 2022, Carini, masquerading under a
fictious name, told an investor:
I didn’t get here because of my looks. I got here because I make my clients money.
You got to understand there is no underlying motive there. If you are not profitable,
I  don’t  make  a  commission.  That  tells  you  two  things.  Number  one,  I  better  be
confident in the company I’m bringing you, and number two, both our interests are
aligned. And that’s the most important way to enter an investment.

69. This and similar statements made by the sales agents throughout the Relevant
Period were false.  Carini, like all of the sales agents, was paid a commission for closing the
investment regardless of how the investment performed.  In addition, investors paid hidden fees
in the form of substantial markups that ranged from 45% to over 100%.  As the result of the

23

markups paid by investors, the value of the shares would need to substantially increase for
investors just to break even.
70. As another example, on or about December 12, 2022, an individual who identified
himself as Scotland told an investor:
 We get paid once, once, once the company makes money, once the company goes
public and they are profitable, that’s how we make our money.  Because when the
company goes public and they are profitable and you make money in the stock, we
get 20% of your profits. . . We get 20% of the profits only that’s it. . . . We make
no money upfront.  Right so that’s why we pick very specific companies that we
feel are the best largest privately owned companies that are going to be going public
sooner rather than later because if they don’t go public and you don’t make money,
neither do we.
. . .
If you don’t make money, we can’t make money.  . . . So it would serve no purpose
just to grab any company out there . . .

71. In addition, in or around September 2021, Scotland falsely represented to an
investor that Max Infinity Fund did not charge fees until after the IPO, at which time the fund
would receive 20 percent of the investor’s profits.
72. The Offering Documents also repeatedly stated that there were no fees.  For
example, the PPMs and LLOAs for all the funds stated that the manager “will not receive a
management fee.”  The PPM also stated that the manager will not receive commissions or fees
for selling fund interests.  Furthermore, the investment advisory agreement attached to the LLOA
stated that the Advisor “will not collect a management fee,” but that the “Fund shall pay the
Advisor carried interest pursuant to Section 7.1 of the Operating Agreement.”
73. While the Offering Documents stated that certain fund fees and expenses “may”
be retained from their investment “as needed,” when the investor received the Welcome Letter
and Supplement specific to their investment, they were told in the Welcome Letter that nothing

24

had been deducted from their contribution: “[n]o fees have been deducted” and “[t]he following
fees have been deducted from your capital contribution: 0 Management Fees.”
74. There is no disclosure of a potential markup in the Offering Documents for Max
1, 1A, 1B, 2, 3, 4 or 5.  After those seven series of the Max Infinity Fund, the Offering
Documents were revised to include boilerplate markup language for Max 6-8 and the Elder
Funds.  The boilerplate language, however, falsely states that “[t]he funds represented by the
markup will be used to provide compensation to the individuals who oversee the management of
the Fund,” when the markup was instead often used to pay sales agent commissions and
distributed to undisclosed fund control persons, such as Cangialosi and Girgis.
75. Throughout the Relevant Period, Scotland routinely sent the misleading Offering
Documents and Welcome Letters to investors.  Scotland knew, or was reckless in not knowing,
that the representations that “[n]o fees have been deducted” and “[t]he following fees have been
deducted from your capital contribution: 0 Management Fees” were false because Scotland knew
that he and others had received a percentage of the principal invested as a commission for the
sale of the fund interests.
2. Exaggerated Returns and Short Term Profits
76. The Max Principals and the sales agents, including Carini, Otar, and Scotland, and
sales agents acting at the direction of Lambert, falsely promised investors exaggerated returns,
often exceeding 200% or 300%, without a reasonable basis for believing that these returns were
achievable.  For example, on or about November 16, 2022, Carini, using an alias, stated to an
investor:  “I am telling you, you are going to make 180 to 300 percent on the first [tick];” and on
or about November 30, 2022, Carini told this investor, “I’m going to make you two to three
times your money on day one.  I’m confident in this.”

25

77. Sales agents also told investors that such extraordinary profits would be achieved
in the short term.  For example, on or about September 8, 2022, an investor asked Carini, who
was pitching a pre-IPO investment, if the IPO will be soon.  Carini responded, “Do I think it’s
gonna be soon? I mean they just, they just hired Goldman Sachs to file their S1. I don’t think, I
know it’s gonna be soon.”
78. These and similar false statements were promoted by the Max Principals in the
scripts and rebuttals provided to the sales agents and in the boiler room training.  For example, in
rebuttals drafted by Cangialosi and distributed by Lambert on or about June 10, 2022, July 8,
2022, and October 31, 2022, sales agents were trained to tell investors, “I’m getting you involved
at a deep discount to it’s [sic] IPO price and by the time it goes live, you’ll be up over 300% . . .”
And the written scripts provided by the Max Principals to the sales agents communicated a short
timeframe for the investment to return these profits.
79. Such deceit, involving exaggerated and short-term returns, was particularly
egregious given the substantial markups that investors were secretly charged.
3. False Promises of No Risk or Volatility
80. Consistent with their training, sales agents routinely misrepresented the risk of
investing in pre-IPO stock.  The Max Principals trained the sales agents that it was critical to
convince investors that pre-IPO investments mitigate risk and are shielded from market
volatility.
81. For example, in rebuttals drafted by Cangialosi and distributed by Lambert, sales
agents were trained to tell investors: “Sell some underperforming stocks, mitigate your risk and
put that behind [pre-IPO stock] which I’m getting you involved at a big discount to it [sic] IPO
price,” and even advised investors, “pull some money out of your equity line of credit.”

26

82. Based on their training, sales agents misled investors into believing that the
investment pitched to them had little or no risk.  For example, on or about July 15, 2022, Carini
told one investor, “the risk of you losing money is literally like jumping out of a basement
window with an umbrella and a parachute on, there is no way that you can get hurt and lose
money.”  On or about November 16, 2022, Carini, using an alias, told another investor:
The other thing that we do give you is peace of mind because, like I said, you are
not subjected to the market volatility. It doesn’t matter what the market conditions
are.  When  you  know  you  invest  here  with  us  the  3,000  shares,  it’s  still  worth
231,000 when you log into your account. You are still going to have 231,000 in the
account.

83. In some instances, sales agents, including Carini, falsely told investors that their
principal would be held in escrow.  In addition, the websites for the Max Infinity Fund
(maxinfinityfund.com) and Elder Fund (theelderfund.com), which the Max Principals controlled,
Sarabella helped to design, and to which Scotland frequently directed prospective investors,
falsely stated, “[y]our investment funds will be held with our custodial bank, Valley National
Bank. . . [w]here you will monitor your account 24/7.”
4. False Portrayal of Expertise and Track Record of Success
84. In soliciting investors by telephone and in email communications, sales agents,
including Carini, Otar, and Scotland, consistent with the boiler room training run by the Max
Principals and the rebuttals distributed by Lambert, falsely portrayed themselves and those
associated with the Max Infinity and Elder Funds as private equity experts with a track record of
success that helped thousands of clients profit handsomely from investing in pre-IPO companies.
85. Max Infinity’s website, “maxinfinityfund.com,”  which Sarabella set up, the Max
Principals controlled, and Scotland routinely disseminated to investors by email, represented its
track record by stating that its clients could buy pre-IPO shares of such companies as Palantir,

27

Airbnb, and Facebook, and that it helped thousands of clients “achieve the lifestyle of their
dreams” through pre-IPO investments.  Similar representations appeared on the Elder Fund
website, which touted “100+ years of expert market experience,” and under “Our Track Record”
lists, among other companies, SoFi and Airbnb.
86. But these and similar representations, appearing on the websites and in statements
made by the sales agents to prospective investors, were false.  Max Infinity Fund was established
in the summer of 2021 and Elder Fund was established in the fall of 2022, which post-date the
IPOs that the funds touted on their websites as their track record.  The Max Principals, through
the Max and Elder Entities, JJRP, and Grand Level, hired largely inexperienced sales agents.
And since the funds’ inception, only one pre-IPO company that the Defendants purported to sell
has held an IPO, which resulted in significant losses to Max Infinity and Elder Fund investors.
87. Scotland directed prospective investors to the misleading Max Infinity and Elder
Fund websites by email on numerous occasions, including, but not limited to, on or about
February 9, 2022, April 1, 2022, December 1, 2022, and March 15, 2023.
88. These and similar false statements regarding the funds’ track record of success
were promoted by the Max Principals in the scripts and rebuttals provided to the sales agents and
in the boiler room training.  For example, in rebuttals drafted by Cangialosi and distributed by
Lambert, sales agents were trained to tell investors, “you’d be doing much better . . . had you
taken my advice and bought the Airbnb and made over 300% on your money” and “give me a
shot and let me show you at 300% just like I did for my other clients who did the Airbnb with
me.”
89. The Max Principals, Carini, Otar, Scotland, and Lambert knew or were reckless in
not knowing that these representations w ere false and misleading because each was employed by

28

Max Infinity Fund from its inception and knew that none of the pre-IPO companies that the fund
purported to sell had gone public and none of Max Infinity Fund’s investors had made a profit.
5. False Representation of SEC Registration
90. The Max Principals, and the sales agents, including Carini, Otar, and Scotland,
repeatedly, and falsely, represented to investors that the Max Infinity and Elder Funds are
registered with the SEC.  Some investors were even told that, as the result of registration, the
Commission conducted regular oversight and examination of the company’s books and records.
91. For example, on or about November 14, 2022, Carini, using an alias, told an
investor:
The fund itself, the LLC fund, everything is filed with the SEC. So in order
to  file,  they  -- they  go  through  all  the  books,  the  accounting,  the  bank
statements,  everything  you  could  think  of  --.  .  .  before  they  even  allow  a
fund to be operational.  . . . And like I said, they come in every quarter and
make sure that everything is up to date.

92. In addition, Scotland and the sales agents, including Otar and Carini, directed
investors to a privately-run website, “sec.report,” purporting it to be an authentic SEC webpage
which falsely presented the Max Infinity Funds as registered with the SEC.  Girgis and Sarabella
supplied the phony website link to sales agents, including Carini and Otar, for purposes of
sending it to prospective investors.
93. In or around September 2021, Scotland falsely represented to an investor that
Max Infinity Fund was registered with the SEC.  In addition, on multiple occasions, including
but not limited to, on or about January 6, 2022, February 22, 2022, and May 3, 2022, Scotland
emailed a misleading link to the “sec.report” website to prospective investors, referring to it as
an “SEC registration link” and “SEC Verification Link.”

29

94. Similarly, on or about August 11, 2021, Otar sent an “sec.report” link by email to
a prospective investor referring to it as the “SEC FILING.”
95. The Max Principals, Carini, Otar, and Scotland knew or were reckless in not
knowing that Max Infinity Fund was not registered with the SEC and the link provided was
misleading because it was not a government website.  These facts were pointed out by some
prospective investors.  For example, on or about April 8, 2022, an investor stated in an email to
Scotland, “You realize this is not the official site of the SEC plus it shows your fund has not
filled [sic] any documents with the SEC. Not only that, but your fund does not appear on
Investor.gov AND I even went to cross check your CIK # with the EDGAR filings look-up, and
again it does not show up.”  Similarly, on or about January 6, 2022, another prospective investor
stated in an email to Scotland that he found no information on Max Infinity Fund on the
“sec.gov” website.  In addition, on or about January 28, 2022, another investor stated in an email
to Scotland that “sec.report” is “not an official government website,” and Scotland forwarded the
email to Sarabella.
6. False Statements Regarding Holding Shares “In House”
96. Offering Documents, the funds’ websites, and the sales agents’ pitches falsely
represented to investors how the funds acquired and controlled purported pre-IPO shares of
stock.
97. For example, sales agents, including Carini and Otar, falsely told investors that
shares were held “in house” or “in inventory,” and the Max Principals trained sales agents to
emphasize this point as part of the rebuttals if a prospective investor questioned the price of the
shares or suggested that they could get the shares cheaper elsewhere.

30

98. Similarly, the Max Infinity and Elder Funds’ websites, which the Max Principals
controlled, and Scotland routinely disseminated, state that “we’ll give you exposure to in house-
shares of all available pre-IPO opportunities.”
99. In addition, the Offering Documents for Max 1, 1A, 1B, 2, 3, 4, and 5, which the
Max Principals controlled, and Scotland routinely disseminated, falsely state that pre-IPO shares
are purchased directly from the pre-IPO company at a price determined by the pre-IPO company.
100. In many instances, however, investors were sold fund interests that represented
shares of pre-IPO stock before the purported shares or interests in shares of the stock were
acquired.  Moreover, for at least Max 1, 1A, 1B, 2, 3, 4, and 5, the funds did not acquire shares
directly, but instead invested in another unregistered fund that purported to own pre-IPO stock.
This fund-of-funds arrangement was not disclosed to investors, and it resulted in investors
unknowingly assuming additional risk and cost.
7. Concealment of Fund Ownership and Control
101. Sarabella was held out to investors as Max Infinity Fund’s owner, organizer,
investment adviser and, at times, manager, but he had no prior industry experience in these roles.
Similarly, the Offering Documents for most of the Max Infinity and Elder Funds held Scotland
out as the funds’ “manager,” but Scotland had no prior experience in this role and largely acted
at the direction of the Max Principals.
102. Cangialosi and Girgis had extensive industry experience but were suspended by
FINRA during the first year of Max Infinity Fund’s existence and also had prior regulatory
suspensions and disciplinary action.  Holding Sarabella and Scotland out in these roles served to
conceal the control that Cangialosi and Girgis exercised over the funds.

31

103. Each Defendant knew that Cangialosi, Girgis, and Sarabella were jointly in
charge of the funds.
104. Yet, while training the sales agents to tout the management of the funds as
experienced and successful, and participating with the sales agents in making these pitches to
investors, Defendants in most cases did not disclose to investors the identity of the control
persons of the funds.
8. False Appearance of Corporate Structure and Oversight
105. The Offering Documents describe a fund that has structure, management, and
oversight.  This too was a fiction.
106. The Offering Documents describe a structure in which corporate records are
maintained and fund assets and expenses are accounted for in a manner expected of multi-million
dollar investment funds.  In truth, fund assets were comingled, fund expenses were combined
with those of other funds and fund series without any tracking or accounting, and standard
corporate records were not maintained.
107. Rather, the corporate records of the funds were reflected in a  couple of
handwritten notebooks maintained by Sarabella, at least one of which has been destroyed.
III. UNREGISTERED SECURITIES OFFERINGS AND BROKERS
108. Neither the funds nor their securities offerings were registered with the
Commission in any capacity, and the sales agents were not associated with a registered broker-
dealer to sell interests in the Max Infinity and Elder Funds.  While all but three of the Max
Infinity and Elder Funds have CIK numbers and EDGAR access, none of these funds made any
filings with the Commission.

32

109. Max Infinity and Elder Fund Offering Documents claim exemption from
registration under Securities Act Section (4)(a)(2) and Regulation D, although none of the funds
filed a Form D.  All of the funds engaged in general solicitation, however.
110. Max Infinity and Elder Funds relied almost exclusively on investor self-
certification of accredited investor status, but the Defendants did not take steps to verify
representations made on accredited investor questionnaires.
111. Moreover, the Max Principals, Carini, Otar, Scotland, and Lambert were not
registered as broker-dealers nor associated with a registered broker-dealer to sell interests in the
Max Infinity and Elder Funds.  But each of them received transaction-based compensation in
exchange for successfully soliciting investors for the funds and, in the case of the Max Principals
and Lambert, also controlled the sales force that was receiving this form of compensation.
112. The sales agents in the boiler rooms were not associated with a registered entity
for purposes of selling interests in the Max Infinity and Elder Funds, and also received
transaction-based compensation for successfully soliciting fund investors.
FIRST CLAIM FOR RELIEF
Violations of Securities Act Section 17(a)
(All Defendants)

113. The Commission re-alleges and incorporates by reference here the allegations in
paragraphs 1 through 112.
114. Defendants, 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, (i) knowingly or recklessly have employed one or more
devices, schemes, or artifices to defraud, (ii) knowingly, recklessly, or negligently have obtained
money or property by means of one or more untrue statements of a material fact or omissions of

33

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 (iii) knowingly, recklessly, or negligently
have engaged in one or more transactions, practices, or courses of business which operated or
would operate as a fraud or deceit upon the purchaser.
115. By reason of the foregoing, Defendants, directly or indirectly, singly or in concert,
have 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
(All Defendants)

116. The Commission re-alleges and incorporates by reference here the allegations in
paragraphs 1 through 112.
117. Defendants, 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, knowingly or
recklessly have (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.
118. By reason of the foregoing, Defendants directly or indirectly, singly or in concert,
have 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].

34

THIRD CLAIM FOR RELIEF
Violations of Advisers Act Sections 206(1) and (2)
(Max Infinity Management, Max Infinity Venture Partners, Elder Fund Management,
Cangialosi, Girgis, Sarabella, and Scotland)

119. The Commission re-alleges and incorporates by reference here the allegations in
paragraphs 1 through 112.
120. Max Infinity Management, Max Infinity Venture Partners, Elder Fund
Management, Cangialosi, Girgis, Sarabella, and Scotland were investment advisers under
Advisers Act Section 202(11) [15 U.S.C. § 80b-2(11)] because, “for compensation,” they each
“engage[d] in the business of advising others . . . as to the value of securities or as to the
advisability of investing in, purchasing, or selling securities.”
121. Sarabella is identified in the Offering Documents as the advisor to each of the
fund series in exchange for carried interest as payment for his investment advisory services.  As
de facto co-owners and controllers of the Max Infinity and Elder Funds, Cangialosi and Girgis
jointly performed, for compensation, investment adviser functions for the funds alongside
Sarabella, regardless of who was identified in the Offering Documents.  The Max Principals
advised the Max Infinity and Elder Funds on which pre-IPO stock to purchase, where to
purchase the purported interests in pre-IPO stock, and at what price.  In addition, the Max
Principals advised the Max Infinity and Elder Funds as to what proceeds would be used to pay
for these purchases.  Scotland was held out as the manager of most of the Max Infinity and Elder
Funds and received recurring payments in exchange for his fund manager role.
122. The Max and Elder Entities also performed the functions of an investment adviser
for the funds, including through their involvement in purchasing decisions and purchasing pre-
IPO shares purportedly for the benefit of the Max Infinity and Elder Funds, even if they had no
formal role as organizer, investment adviser, or manager for a particular fund.

35

123. Max Infinity Management, Max Infinity Venture Partners, Elder Fund
Management, Cangialosi, Girgis, Sarabella, and Scotland had an adviser-client relationship with
and, therefore, owed a fiduciary duty to the Max Infinity and Elder Funds.
124. During the Relevant Period, while acting as an investment adviser, Max Infinity
Management, Max Infinity Venture Partners, Elder Fund Management, Cangialosi, Girgis,
Sarabella, and Scotland, by use of the mails or any means or instrumentality of interstate
commerce, directly or indirectly, (i) employed a device, scheme, or artifice to defraud a client or
prospective client; and (ii) engaged in transactions, practices, or courses of business that operated
as a fraud or deceit upon a client or prospective client.
125. By reason of the foregoing, Max Infinity Management, Max Infinity Venture
Partners, Elder Fund Management, Cangialosi, Girgis, Sarabella, and Scotland directly or
indirectly, singly or in concert, have violated and, unless enjoined, will again violate Advisers
Act Sections 206(1) and 206(2) [15 U.S.C. §§ 80b-6(1) and 80b-6(2)].
FOURTH CLAIM FOR RELIEF
Violations of Advisers Act Section 206(4) and Rule 206(4)-8 Thereunder
(Max Infinity Management, Max Infinity Venture Partners, Elder Fund Management,
Cangialosi, Girgis, Sarabella, and Scotland)

126. The Commission re-alleges and incorporates by reference here the allegations in
paragraphs 1 through 112 and paragraphs 120 through 123.
127. The Offering Documents for the Max Infinity and Elder Funds state that the
purpose of each fund is to “invest in Portfolio Company Securities” and that each fund relies on
the exception in either Section 3(c)(1) or (c)(7) of the Investment Company Act.
128. Max Infinity Management, Max Infinity Venture Partners, Elder Fund
Management, Cangialosi, Girgis, Sarabella, and Scotland were investment advisers under
Advisers Act Section 202(11) [15 U.S.C. § 80b-2(11)] and had an adviser-client relationship

36

with and therefore owed a fiduciary duty to the Max Infinity and Elder Funds, which were
pooled investment vehicles as defined in Rule 206(4)-8(b) [17 C.F.R. § 275.206(4)-8(b)].
129. While acting as investment advisers, Max Infinity Management, Max Infinity
Venture Partners, Elder Fund Management, Cangialosi, Girgis, Sarabella, and Scotland, by use
of the mails or any means or instrumentality of interstate commerce, directly or indirectly,
knowingly, recklessly, or negligently: (i) made one or more untrue statements of 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, to any investor or
prospective investor in the pooled investment vehicle; and/or (ii) engaged in any act, practice, or
course of business which is fraudulent, deceptive, or manipulative, with respect to any investor
or prospective investor in the pooled investment vehicle.
130. By reason of the foregoing, Max Infinity Management, Max Infinity Venture
Partners, Elder Fund Management, Cangialosi, Girgis, Sarabella, and Scotland, directly or
indirectly, singly or in concert, have violated and, unless enjoined, will again violate Advisers
Act Section 206(4) [15 U.S.C. § 80b-6(4)] and Rule 206(4)-8 thereunder [17 C.F.R.
§ 275.206(4)-8].
FIFTH CLAIM FOR RELIEF
Violations of Securities Act Sections 5(a) and (c)
(All Defendants)

131. The Commission re-alleges and incorporates by reference here the allegations in
paragraphs 1 through 112.
132. During the Relevant Period, Defendants, directly or indirectly, singly or in
concert: (a) made use of the means or instruments of transportation or communication in
interstate commerce or of the mails to sell securities through the use or medium of a prospectus

37

or otherwise; (b) for the purpose of delivery after sale, carried or caused to be carried through the
mails or in interstate commerce, by means or instruments of transportation, securities; and/or (c)
made use of means or instruments of transportation or communication in interstate commerce or
of the mails to offer to sell securities through the use or medium of a prospectus or otherwise.
133. No registration statement was filed or was in effect with the Commission for any
of the securities offered or sold by the Defendants.
134. By reason of the foregoing, Defendants, directly or indirectly, singly or in concert,
have violated and, unless enjoined, will again violate Securities Act Sections 5(a) and 5(c) [15
U.S.C. §§ 77e(a) and 77e(c)].
SIXTH CLAIM FOR RELIEF
Violations of Exchange Act Section 15(a)(1)
(JJRP, Grand Level, Cangialosi, Girgis, Sarabella, Carini, Otar, Scotland, and Lambert)

135. The Commission re-alleges and incorporates by reference here the allegations in
paragraphs 1 through 112.
136. JJRP, Grand Level, Cangialosi, Girgis, Sarabella, Carini, Otar, Scotland, and
Lambert, while not registered with the Commission as a broker or dealer or associated with a
registered broker or dealer, made use of the mails or other means or instrumentality of interstate
commerce to effect transactions in, or to induce or attempt to induce the purchase or sale of,
securities other than exempted securities or commercial paper, bankers’ acceptances, or
commercial bills.
137. By reason of the foregoing, JJRP, Grand Level, Cangialosi, Girgis, Sarabella,
Carini, Otar, Scotland, and Lambert, directly or indirectly, singly or in concert, have violated
and, unless enjoined, will again violate Exchange Act Section 15(a)(1) [15 U.S.C. § 78o(a)].

38

SEVENTH CLAIM FOR RELIEF
Aiding and Abetting Violations of Securities Act Section 17(a)
In the Alternative
(JJRP, Grand Level, Cangialosi, Girgis, Sarabella, Carini, Otar, Scotland, and Lambert)

138. The Commission re-alleges and incorporates by reference here the allegations in
paragraphs 1 through 112 and paragraphs 114 through 115.
139. As alleged herein, the Max Principals, the Max and Elder Entities, JJRP, and
Grand Level violated Securities Act Section 17(a) [15 U.S.C. § 77q(a)].
140. Carini, Otar, Scotland, and Lambert knowingly or recklessly provided substantial
assistance to the violations of Securities Act Section 17(a) [15 U.S.C. § 77q(a)] by the Max
Principals, the Max and Elder Entities, JJRP, and Grand Level.
141. Moreover, as alleged herein, Cangialosi, Girgis, the Max and Elder Entities, JJRP,
and Grand Level violated Securities Act Section 17(a) [15 U.S.C. § 77q(a)].
142. Sarabella knowingly or recklessly provided substantial assistance to the violations
of Securities Act Section 17(a) [15 U.S.C. § 77q(a)] by Cangialosi, Girgis, the Max and Elder
Entities, JJRP, and Grand Level.
143. Furthermore, as alleged herein, the Max and Elder Entities, JJRP, and Grand
Level violated Securities Act Section 17(a) [15 U.S.C. § 77q(a)].
144. Cangialosi and Girgis knowingly or recklessly provided substantial assistance to
the violations of Securities Act Section 17(a) [15 U.S.C. § 77q(a)] by the Max and Elder Entities,
JJRP, and Grand Level.
145. Also, as alleged herein, the Max Principals and the Max and Elder Entities
violated Securities Act Section 17(a) [15 U.S.C. § 77q(a)].

39

146. JJRP and Grand Level knowingly or recklessly provided substantial assistance to
the violations of Securities Act Section 17(a) [15 U.S.C. § 77q(a)] by the Max Principals and the
Max and Elder Entities.
147. By reason of the foregoing, JJRP, Grand Level, Cangialosi, Girgis, Sarabella,
Carini, Otar, Scotland, and Lambert are liable for aiding and abetting violations of Securities Act
Section 17(a), and unless enjoined, will again aid and abet these violations.
EIGHTH CLAIM FOR RELIEF
Aiding and Abetting Violations of Exchange Act Section 10(b) and Rule 10b-5 Thereunder
In the Alternative
(JJRP, Grand Level, Cangialosi, Girgis, Sarabella, Carini, Otar, Scotland, and Lambert)

148. The Commission re-alleges and incorporates by reference here the allegations in
paragraphs 1 through 112 and paragraphs 117 through 118.
149. As alleged herein, the Max Principals, the Max and Elder Entities, JJRP, and
Grand Level violated Exchange Act Section 10(b) [15 U.S.C. § 78j(b)] and Rule 10b-5
thereunder [17 C.F.R. § 240.10b-5].
150. Carini, Otar, Scotland, and Lambert knowingly or recklessly provided substantial
assistance to the violations of Exchange Act Section 10(b) [15 U.S.C. § 78j(b)] and Rule 10b-5
thereunder [17 C.F.R. § 240.10b-5] by the Max Principals, the Max and Elder Entities, JJRP, and
Grand Level.
151. Moreover, as alleged herein, Cangialosi, Girgis, the Max and Elder Entities, JJRP,
and Grand Level violated Exchange Act Section 10(b) [15 U.S.C. § 78j(b)] and Rule 10b-5
thereunder [17 C.F.R. § 240.10b-5].
152. Sarabella knowingly or recklessly provided substantial assistance to the violations
of Exchange Act Section 10(b) [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. §
240.10b-5] by Cangialosi, Girgis, the Max and Elder Entities, JJRP, and Grand Level.

40

153. Furthermore, as alleged herein, the Max and Elder Entities, JJRP, and Grand
Level violated Exchange Act Section 10(b) [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17
C.F.R. § 240.10b-5].
154. Cangialosi and Girgis knowingly or recklessly provided substantial assistance to
the violations of Exchange Act Section 10(b) [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17
C.F.R. § 240.10b-5] by the Max and Elder Entities, JJRP, and Grand Level.
155. Also, as alleged herein, the Max Principals and the Max and Elder Entities
violated Exchange Act Section 10(b) [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R.
§ 240.10b-5].
156. JJRP and Grand Level knowingly or recklessly provided substantial assistance to
the violations of Exchange Act Section 10(b) [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17
C.F.R. § 240.10b-5] by the Max Principals and the Max and Elder Entities.
157. By reason of the foregoing, JJRP, Grand Level, Cangialosi, Girgis, Sarabella,
Carini, Otar, Scotland, and Lambert are liable for aiding and abetting violations of Exchange Act
Section 10(b) [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5], and
unless enjoined, will again aid and abet these violations.
NINTH CLAIM FOR RELIEF
Aiding and Abetting Violations of Advisers Act Sections 206(1) and (2)
(JJRP, Grand Level, Carini, Otar, and Lambert)

158. The Commission re-alleges and incorporates by reference here the allegations in
paragraphs 1 through 112 and paragraphs 120 through 125.
159. Max Infinity Management, Max Infinity Venture Partners, Elder Fund
Management, Cangialosi, Girgis, Sarabella, and Scotland violated Advisers Act Sections 206(1)
and 206(2) [15 U.S.C. §§ 80b-6(1) and 80b-6(2)].

41

160. JJRP, Grand Level, Carini, Otar, and Lambert knowingly or recklessly provided
substantial assistance to the violations by Max Infinity Management, Max Infinity Venture
Partners, Elder Fund Management, Cangialosi, Girgis, Sarabella, and Scotland.
161. As a result of the forgoing, JJRP, Grand Level, Carini, Otar, and Lambert are
liable for aiding and abetting violations of Advisers Act Sections 206(1) and 206(2) [15 U.S.C.
§§ 80b-6(1) and 80b-6(2)], and unless enjoined, will again aid and abet these violations.
TENTH CLAIM FOR RELIEF
Aiding and Abetting Violations of Advisers Act Sections 206(1) and (2)
In the Alternative
(Cangialosi, Girgis, Sarabella, and Scotland)

162. The Commission re-alleges and incorporates by reference here the allegations in
paragraphs 1 through 112 and paragraphs 120 through 125.
163. Max Infinity Management, Max Infinity Venture Partners, and Elder Fund
Management violated Advisers Act Sections 206(1) and 206(2) [15 U.S.C. §§ 80b-6(1) and 80b-
6(2)].
164. Cangialosi, Girgis, Sarabella, and Scotland knowingly or recklessly provided
substantial assistance to the violations by Max Infinity Management, Max Infinity Venture
Partners, and Elder Fund Management.
165. As a result of the forgoing, Cangialosi, Girgis, Sarabella, and Scotland are liable
for aiding and abetting violations of Advisers Act Sections 206(1) and 206(2) [15 U.S.C. §§ 80b-
6(1) and 80b-6(2)], and unless enjoined, will again aid and abet these violations.

42

ELEVENTH CLAIM FOR RELIEF
Aiding and Abetting Violations of Advisers Act Section 206(4)
and Rule 206(4)-8 Thereunder
(JJRP, Grand Level, Carini, Otar, and Lambert)

166. The Commission re-alleges and incorporates by reference here the allegations in
paragraphs 1 through 112, paragraphs 120 through 123, and paragraphs 127 through 130.
167. Max Infinity Management, Max Infinity Venture Partners, Elder Fund
Management, Cangialosi, Girgis, Sarabella, and Scotland violated Advisers Act Section 206(4)
[15 U.S.C. § 80b-6(4)] and Rule 206(4)-8 thereunder [17 C.F.R. § 275.206(4)-8].
168. JJRP, Grand Level, Carini, Otar, and Lambert knowingly or recklessly provided
substantial assistance to Max Infinity Management, Max Infinity Venture Partners, Elder Fund
Management, Cangialosi, Girgis, Sarabella, and Scotland with respect to their violations of
Advisers Act Section 206(4) [15 U.S.C. § 80b-6(4)] and Rule 206(4)-8 thereunder [17 C.F.R. §
275.206(4)-8].
169. As a result of the forgoing, JJRP, Grand Level, Carini, Otar, and Lambert are
liable for aiding and abetting violations of Advisers Act Section 206(4) [15 U.S.C. § 80b-6(4)]
and Rule 206(4)-8 thereunder [17 C.F.R. § 275.206(4)-8], and unless enjoined, will again aid and
abet these violations.
TWELFTH CLAIM FOR RELIEF
Aiding and Abetting Violations of Advisers Act Section 206(4)
and Rule 206(4)-8 Thereunder
In the Alternative
(Cangialosi, Girgis, Sarabella, and Scotland)

170. The Commission re-alleges and incorporates by reference here the allegations in
paragraphs 1 through 112, paragraphs 120 through 123, and paragraphs 127 through 130.

43

171. Max Infinity Management, Max Infinity Venture Partners, and Elder Fund
Management violated Advisers Act Section 206(4) [15 U.S.C. § 80b-6(4)] and Rule 206(4)-8
thereunder [17 C.F.R. § 275.206(4)-8].
172. Cangialosi, Girgis, Sarabella, and Scotland knowingly or recklessly provided
substantial assistance to Max Infinity Management, Max Infinity Venture Partners, and Elder
Fund Management with respect to their violations of Advisers Act Section 206(4) [15 U.S.C.
§ 80b-6(4)] and Rule 206(4)-8 thereunder [17 C.F.R. § 275.206(4)-8].
173. As a result of the forgoing, Cangialosi, Girgis, Sarabella, and Scotland are liable
for aiding and abetting violations of Advisers Act Section 206(4) [15 U.S.C. § 80b-6(4)] and
Rule 206(4)-8 thereunder [17 C.F.R. § 275.206(4)-8], and unless enjoined, will again aid and
abet these violations.
THIRTEENTH CLAIM FOR RELIEF
Aiding and Abetting Violations of Exchange Act Section 15(a)(1)
(Max Infinity Management, Max Infinity Venture Partners, and Elder Fund Management)

174. The Commission re-alleges and incorporates by reference here the allegations in
paragraphs 1 through 112 and paragraphs 136 through 137.
175. JJRP, Grand Level, Cangialosi, Girgis, Sarabella, Carini, Otar, Scotland, and
Lambert violated Exchange Act Section 15(a)(1) [15 U.S.C. § 78o(a)] in selling the Max Infinity
and Elder Funds.
176. Max Infinity Management, Max Infinity Venture Partners, and Elder Fund
Management knowingly or recklessly provided substantial assistance to the Exchange Act
Section 15(a)(1) violations by JJRP, Grand Level, Cangialosi, Girgis, Sarabella, Carini, Otar,
Scotland, and Lambert.

44

177. By reason of the foregoing, Max Infinity Management, Max Infinity Venture
Partners, and Elder Fund Management are liable for aiding and abetting violations of Section
15(a)(1) [15 U.S.C. § 78o(a)],  and unless enjoined, will again aid and abet these violations.
FOURTEENTH CLAIM FOR RELIEF
Aiding and Abetting Violations of Exchange Act Section 15(a)(1)
In the Alternative
(Cangialosi, Girgis, Sarabella, and Lambert)

178. The Commission re-alleges and incorporates by reference here the allegations in
paragraphs 1 through 112 and paragraphs 136 through 137.
179. JJRP, Grand Level, Carini, Otar, Scotland, and Lambert violated Exchange Act
Section 15(a)(1) [15 U.S.C. § 78o(a)] in selling the Max Infinity and Elder Funds.
180. Cangialosi, Girgis, and Sarabella knowingly or recklessly provided substantial
assistance to the Exchange Act Section 15(a)(1) violations by JJRP, Grand Level, Carini, Otar,
Scotland, and Lambert.   Lambert knowingly or recklessly provided substantial assistance to the
Exchange Act Section 15(a)(1) violations by JJRP, Grand Level, Carini, Otar, and Scotland.
181. By reason of the foregoing, Cangialosi, Girgis, Sarabella, and Lambert are liable
for aiding and abetting violations of Section 15(a)(1) [15 U.S.C. § 78o(a)], and unless enjoined,
will again aid and abet these violations.
FIFTEENTH CLAIM FOR RELIEF
Violations of Exchange Act Section 10(b) and Rule 10b-5 Thereunder
Under Section 20(a) of the Exchange Act
In the Alternative
(Cangialosi, Girgis, Sarabella, and Lambert)

182. The Commission re-alleges and incorporates by reference here the allegations in
paragraphs 1 through 112 and paragraphs 117 through 118.

45

183. As alleged above, the Max and Elder Entities, JJRP, and Grand Level violated
Exchange Act Section 10(b) [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. §
240.10(b)-5].
184. At all relevant times, Cangialosi, Girgis, and Sarabella were control persons of the
Max and Elder Entities, JJRP and Grand Level and were culpable participants in the violations
by the Max and Elder Entities, JJRP, and Grand Level of Exchange Act Section 10(b) [15 U.S.C.
§ 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10(b)-5].
185. By reason of the foregoing, Cangialosi, Girgis, and Sarabella are liable as control
persons under Section 20(a) of the Exchange Act [15 U.S.C. § 78t(a)] for violations of Exchange
Act Section 10(b) [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10(b)-5] by
the Max and Elder Entities, JJRP, and Grand Level.
186. At all relevant times, Lambert was a control person of Grand Level and was a
culpable participant in Grand Level’s violations of Exchange Act Section 10(b) [15 U.S.C. §
78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10(b)-5].
187. By reason of the foregoing, Lambert is liable as a control person under Section
20(a) of the Exchange Act [15 U.S.C. § 78t(a)] for violations of Exchange Act Section 10(b) [15
U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10(b)-5] by Grand Level.
SIXTEENTH CLAIM FOR RELIEF
Violations of Exchange Act Section 15(a)(1)
Under Section 20(a) of the Exchange Act
In the Alternative
(Cangialosi, Girgis, Sarabella, and Lambert)
188. The Commission re-alleges and incorporates by reference here the allegations in
paragraphs 1 through 112 and paragraphs 136 through 137.

46

189. As alleged above, JJRP and Grand Level violated Exchange Act Section 15(a)(1)
[15 U.S.C. § 78o(a)].
190. At all relevant times, Cangialosi, Girgis, and Sarabella were control persons of
JJRP, and Grand Level and were culpable participants in the violations of JJRP and Grand Level
of Exchange Act Section 15(a)(1) [15 U.S.C. § 78o(a)].
191. By reason of the foregoing, Cangialosi, Girgis, and Sarabella are liable as control
persons under Section 20(a) of the Exchange Act [15 U.S.C. § 78t(a)] for violations of Exchange
Act Section 15(a)(1) [15 U.S.C. § 78o(a)] by JJRP and Grand Level.
192. At all relevant times, Lambert was a control person of Grand Level and was a
culpable participant in Grand Level’s violations of Exchange Act Section 15(a)(1) [15 U.S.C. §
78o(a)].
193. By reason of the foregoing, Lambert is liable as a control person under Section
20(a) of the Exchange Act [15 U.S.C. § 78t(a)] for violations of Exchange Act Section 15(a)(1)
[15 U.S.C. § 78o(a)] by Grand Level.
SEVENTEENTH CLAIM FOR RELIEF
Disgorgement and Prejudgment Interest Against the Relief Defendants
Under Section 21(d) of the Exchange Act
(JCang1 Corp., Girgis Consulting, Inc., October United Marketing Inc., Under Par
Consulting Inc., Put Them on the Books Marketing Inc., Perfect Perfection, Ltd., Scotland
Omega Ltd., and Franz & Anthony Holdings Corp.)

194. The Commission re-alleges and incorporates by reference here the allegations in
paragraphs 1 through 112, paragraphs 114 through 115, paragraphs 117 through 118, paragraphs
120 through 125, paragraphs 127 through 130, paragraphs 132 through 134, paragraphs 136
through 137, paragraphs 139 through 147, paragraphs 149 through 157, paragraphs 159 through
161, paragraphs 163 through 165, paragraphs 167 through 169, paragraphs 171 through 173,

47

paragraphs 175 through 177, paragraphs 179 through 181, paragraphs 183 through 187, and
paragraphs 189 through 193.
195. Relief Defendants JCang1, Girgis Consulting, October United, Under Par,
PTOTB, Perfect Perfection, Scotland Omega, and Franz & Anthony each received, directly or
indirectly, funds or other property, which are either the proceeds of, or are traceable to the
proceeds of, unlawful activities alleged in this Complaint to which they have no legitimate claim.
196. By reason of the foregoing, it would be inequitable for Relief Defendants to retain
the proceeds from violations of the federal securities laws and such proceeds should be disgorged
pursuant to Exchange Act Sections 21(d) [15 U.S.C. §§ 78u(d)].
PRAYER FOR RELIEF
 WHEREFORE, the Commission requests that the Court enter a Final Judgment:
I.
 In a form consistent with Rule 65(d) of the Federal Rules of Civil Procedure,
permanently restraining and enjoining Defendants, their agents, servants, employees, and
attorneys and all persons in active concert or participation with any of them, who receive actual
notice of the judgment by personal service or otherwise, from violating, directly or indirectly:
(1) Securities Act Section 17(a) [15 U.S.C. § 77q(a)];
(2) Exchange Act Section 10(b) [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder
[17 C.F.R. § 240.10(b)-5];
(3) Advisers Act Sections 206(1), 206(2), and 206(4) [15 U.S.C. §§ 80b-6(1), (2),
and (4)] and Rule 206(4)-8 thereunder [17 C.F.R. § 275.206(4)-8];
(4)   Securities Act Sections 5(a) and 5(c) [15 U.S.C. § 77e(a) and 77e(c)]; and
(5) Exchange Act Section 15(a)(1) [15 U.S.C. § 78o];

48

II.
 Ordering Defendants to disgorge, where appropriate, on a joint and several basis, the ill-
gotten gains they received as a result of the violations alleged herein and to pay prejudgment
interest thereon pursuant to Exchange Act Sections 21(d)(3)  , (5), and (7) [15 U.S.C. §§
78u(d)(3), (5), and (7)];
III.
 Ordering Defendants to each pay a civil money penalty pursuant to Securities Act Section
20(d) [15 U.S.C. § 77t(d)], Exchange Act Section 21(d)(3) [15 U.S.C. § 78u(d)(3)], and Advisers
Act Section 209 [15 U.S.C. § 80b-9];
IV.
 Ordering that Cangialosi, Girgis, and Sarabella be barred from serving as an officer or
director of a public issuer pursuant to Section 20(e) of the Securities Act [15 U.S.C. § 77t(e)] and
Section 21(d)(2) of the Exchange Act [15 U.S.C. § 78u(d)(2)];
V.
 Permanently restraining and enjoining Cangialosi, Girgis, Sarabella, Carini, Otar,
Scotland, and Lambert from directly or indirectly, including (but not limited to) through any
entity owned or controlled by him, participating in the issuance, purchase, offer, or sale of any
security; provided, however, that such injunction shall not prevent him from purchasing or
selling securities listed on a national securities exchange for his own personal account;
VI.
 Ordering each of the Relief Defendants to disgorge, on a joint and several basis with the
individual Defendant who owns or controls that Relief Defendant,  as appropriate, the ill-gotten

49

gains the Relief Defendant received and to pay prejudgment interest thereon pursuant to
Exchange Act Sections 21(d) [15 U.S.C. §§ 78u(d)];
VII.
Retaining jurisdiction over this action to implement and carry out the terms of all orders
and decrees that may be entered;
VIII.
 Granting such other and further relief this Court may deem equitable and just.
JURY DEMAND

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

Dated: January 31, 2025   Respectfully submitted,

      /s/  Derek S. Bentsen
      Derek S. Bentsen
Kenneth W. Donnelly (pro hac vice motion pending)

SECURITIES AND EXCHANGE COMMISSION
 100 F Street, N.E.
 Washington, DC 20549
 Phone: 202-551-6426 (Bentsen direct)
 Email: [email protected]
Phone: 202-551-4946 (Donnelly direct)
 Email: [email protected]

 Attorneys for the Plaintiff

UNITED STATES DISTRICT COURT 
EASTERN DISTRICT OF NEW YORK 

 
 
 
 
 
 
 
 
  
 
 No. 1:25-cv-549 
 
 
 COMPLAINT 
 
 
 
 

 

 

 

 

 

 

 

 

 

Plaintiff Securities and Exchange Commission (“Commission” or “SEC”), for its 

Complaint against Max Infinity Management LLC d/b/a Max Infinity Fund (“Max Infinity 

Management”), Max Infinity Venture Partners, Inc. (“Max Infinity Venture Partners”), Elder 

Fund Management LLC (“Elder Fund Management”), JJRP United Corp (“JJRP”), Grand Level 

 
SECURITIES AND EXCHANGE 
COMMISSION, 
 
                                   Plaintiff, 
        v. 
 
MAX INFINITY MANAGEMENT LLC 
D/B/A MAX INFINITY FUND, MAX 
INFINITY VENTURE PARTNERS, INC., 
ELDER FUND MANAGEMENT LLC, 
JJRP UNITED CORP, GRAND LEVEL 
CONSULTING INC., 
 
                                   Entity Defendants, 
 
JOHN S. CANGIALOSI, JR., PETER N. 
GIRGIS, GENE “JERRY” SARABELLA, 
ENRICO A. “ED” CARINI, CANER “JOHN” 
OTAR, CHESTER E. “CHETT” SCOTLAND, 
and FRANZ H. LAMBERT II, 
 
                                   Individual Defendants, 
 
JCANG1 CORP., GIRGIS CONSULTING, 
INC., OCTOBER UNITED MARKETING 
INC., UNDER PAR CONSULTING INC., 
PUT THEM ON THE BOOKS MARKETING 
INC., PERFECT PERFECTION, LTD., 
SCOTLAND OMEGA LTD, and FRANZ & 
ANTHONY HOLDINGS CORP., 
 
                                   Relief Defendants. 
 

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Consulting Inc. (“Grand Level”), John S. Cangialosi, Jr. (“Cangialosi”), Peter N. Girgis 

(“Girgis”), Gene “Jerry” Sarabella (“Sarabella”), Enrico A. “Ed” Carini (“Carini”), Caner “John” 

Otar (“Otar”), Chester E. “Chett” Scotland (“Scotland”), and Franz H. Lambert II (“Lambert”) 

(collectively, “Defendants”), and Relief Defendants JCang1 Corp., Girgis Consulting, Inc., 

October United Marketing Inc., Under Par Consulting Inc., Put Them on the Books Marketing 

Inc., Perfect Perfection, Ltd., Scotland Omega Ltd., and Franz & Anthony Holdings Corp. 

(collectively, “Relief Defendants”), alleges as follows: 

SUMMARY 

1. From at least July 2021 to April 2023 (the “Relevant Period”), Defendants 

engaged in a scheme to defraud investors and prospective investors using boiler room-style high 

pressure sales tactics, false and misleading statements, and other means of trickery and deception 

to offer and sell investment fund interests purportedly representing shares of stock in private 

companies that had not yet held an initial public offering (referred to as “pre-IPO stock”).  The 

investments were offered in the names of two related funds, Max Infinity Fund and Elder Fund 

(defined in paragraphs 33 and 34).  Through the conduct of each Defendant, which violated the 

antifraud, securities registration, and broker-dealer registration provisions of the federal 

securities laws, the scheme raised over $70 million from more than 550 investors throughout the 

United States. 

2. The scheme was orchestrated and controlled during the Relevant Period by 

Defendants Cangialosi, Girgis, and Sarabella (the “Max Principals”).  Cangialosi and Girgis are 

veterans in the securities industry each with a history of disciplinary proceedings.  Both were 

suspended by the Financial Industry Regulatory Authority (“FINRA”) during a portion of the 

Relevant Period and now are permanently barred by FINRA.  But their control of the investment 

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funds’ operations was largely hidden from investors, while Sarabella, the third principal of the 

scheme, having virtually no experience in financial services, was held out publicly as the 

investment funds’ owner, organizer, adviser, and, at times, manager. 

3. The Max Principals operated the fraudulent scheme through a variety of entities, 

including Defendants Max Infinity Management, Max Infinity Venture Partners, and Elder Fund 

Management (collectively, the “Max and Elder Entities”) and two entities that operated boiler 

rooms, Defendants JJRP and Grand Level.  Defendant Lambert owned Grand Level but 

established it at the direction of, and controlled it jointly with, the Max Principals.  Defendant 

Scotland, who had no experience in fund management, was held out publicly as the “manager” 

of most of the investment funds. 

4. The Max Principals hired and trained a workforce of unregistered sales agents, 

including Defendants Carini and Otar, to cold call and pitch pre-IPO stock to thousands of 

prospective investors, many of them senior citizens, using canned scripts and rebuttals that were 

riddled with false and misleading statements and deceptive devices such as fake names, 

fabricated credentials and successes, and spoofed telephone numbers.  Defendants Carini and 

Otar made false and misleading statements to investors and were each in charge of a team of 

other sales agents who pitched investors.         

5. Over the phone, through email, and in the funds’ offering documents, and while 

portraying themselves as private equity experts working for a Commission-registered fund, 

Defendants and the sales agents that they trained and managed routinely conveyed to prospective 

investors that the pre-IPO stock that was purportedly held in their funds would return quick 

profits of 200% or more, involved no upfront fees, entailed little to no risk, and would be 

shielded from market volatility.  Defendants and their workforce of sales agents also represented 

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to investors that their funds had an impressive track record of success in previously 

recommending pre-IPO stock, that the pre-IPO stock was “in house” at the funds, and that 

investors’ proceeds would be held in an escrow account until the pre-IPO company went public.  

None of this was true.   

6. In reality, the funds, formed in July 2021, were not registered with the 

Commission, had no track record of success, and were organized, advised, and managed by 

individuals with no expertise in investment fund management.  The funds did not hold investor 

proceeds in escrow, investments were not shielded from market volatility, and Defendants had 

no reasonable basis for representing to investors that they could expect substantial short-term 

profits with little or no risk.  In many instances, Defendants sold investors shares of pre-IPO 

stock that were not “in house,” but instead the Max Principals had acquired an interest in an 

unaffiliated fund purporting to have pre-IPO stock but which also was not registered with the 

Commission. 

7. Despite telling investors that there were no upfront fees or commissions, 

Defendants sold interests in pre-IPO stock at a price secretly marked-up by 45% to over 100% 

above the price that the Max and Elder Entities paid to acquire the purported shares, securing 

immediate, substantial profits for themselves, while increasing the risk that investors would incur 

substantial losses.  Defendants used these undisclosed charges to pay sizable and undisclosed 

commissions to their sales agents, as well as to fund bank accounts held in the name of the Relief 

Defendants, from which monies were then withdrawn for personal expenses, including (in the 

case of some Defendants) to buy cars and jewelry and take expensive vacations. 

8. To date, only one pre-IPO company at issue has gone public, and this event 

resulted in substantial financial losses for fund investors.  Neither Defendants, nor the offer and 

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sale of fund interests, were registered with the Commission or eligible for an exemption from 

registration during the Relevant Period.   

9. By virtue of the conduct alleged herein, Defendants have violated, and/or aided 

and abetted violations of, Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 (“Securities 

Act”) [15 U.S.C. §§ 77e(a), 77e(c), and 77q(a)], Sections 10(b) and 15(a) of the Securities 

Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. §§ 78j(b) and 78o(a)] and Rule 10b-5 

thereunder [17 C.F.R. § 240.10b-5], and Sections 206(1), 206(2), and 206(4) of the Investment 

Advisers Act of 1940 (“Advisers Act”) [15 U.S.C. §§ 80b-6(1), (2), and (4)] and Rule 206(4)-8 

thereunder [17 C.F.R. § 275.206(4)-8].  Also, each of the Max Principals is liable as a control 

person under Section 20(a) of the Exchange Act [15 U.S.C. § 78t(a)] for violations by the Max 

and Elder Entities, JJRP, and Grand Level of Exchange Act Section 10(b), Rule 10b-5, and 

Section 15(a)(1); and Lambert is liable as a control person under Exchange Act Section 20(a) for 

violations by Grand Level of Exchange Act Section 10(b), Rule 10b-5, and Section 15(a)(1). 

10. The Commission seeks a final judgment: (a) permanently enjoining Defendants 

from violating the federal securities laws and rules this Complaint alleges they violated; (b) 

ordering Defendants to disgorge the ill-gotten gains they received as a result of their violations 

and to pay prejudgment interest thereon; (c) ordering Defendants to pay civil money penalties for 

their violations; (d) entering appropriate conduct-based injunctions against Defendants 

Cangialosi, Girgis, Sarabella, Carini, Otar, Scotland, and Lambert; (e) entering an order barring 

Defendants Cangialosi, Girgis, and Sarabella from serving as an officer or director of a public 

issuer; (f) ordering the Relief Defendants, each of which is owned or controlled by an individual 

defendant, to disgorge the ill-gotten gains they received as a result of Defendants’ violations and 

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to pay prejudgment interest thereon; and (g) ordering any other and further relief the Court may 

deem just and proper. 

JURISDICTION AND VENUE 

11. The Commission brings this action, and the Court has subject matter jurisdiction 

over this action, under Securities Act Sections 20(a) and (d) and 22(a) [15 U.S.C. §§ 77t(a) and 

(d), and 77v(a)]; Exchange Act Sections 21(d) and 27(a) [15 U.S.C. §§ 78u(d) and 78aa(a)]; and 

Advisers Act Sections 209(d) and (e) and 214(a) [15 U.S.C. §§ 80b-9(d) and (e), and 80b-14(a)]. 

12. Venue is proper in this District under Securities Act Section 22(a) [15 U.S.C. § 

77v(a)], Exchange Act Section 27(a) [15 U.S.C. § 78aa(a)], and Advisers Act Section 214(a) [15 

U.S.C. § 80b-14(a)] because certain of the acts or transactions constituting violations of the 

federal securities laws, including offers and sales to certain investors, occurred in this District 

and because Defendants are found, inhabit, or transact business in this District.  Among other 

things, several of the individual defendants reside in either Kings County, Richmond County, or 

Queens County, each within this District.  Additionally, defendant Grand Level and many of the 

relief defendants have their primary corporate address in this District.  During the Relevant 

Period, prospective investors residing here were solicited by one or more of the Defendants, and 

emails, mailings, and sales pitches were delivered to the investors in this District. 

DEFENDANTS 

13. Max Infinity Management LLC d/b/a Max Infinity Fund (“Max Infinity 

Management”), is a New York limited liability company formed on or about May 5, 2021.  On 

January 20, 2022, Max Infinity Management filed a “Certificate of Assumed Name” to do 

business as “Max Infinity Fund.”  Fund investors were generally directed to deposit funds into 

accounts in the name of Max Infinity Management, and Max Infinity Management was one of 

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the two entities that acquired interests in pre-IPO stock or interests in funds that purported to 

hold interests in pre-IPO stock.  Sarabella is the sole legal owner and managing member of Max 

Infinity Management and is the “authorized signer” on its bank accounts, but Max Infinity 

Management is beneficially owned and controlled jointly by the Max Principals.  Max Infinity 

Management has never been registered with the Commission in any capacity. 

14. Max Infinity Venture Partners, Inc. (“Max Infinity Venture Partners”) is a 

New Jersey corporation formed on or about April 8, 2022.  Sarabella is its sole legal owner, but 

Max Infinity Venture Partners is beneficially owned and controlled jointly by the Max 

Principals.  Max Infinity Venture Partners was one of the two entities that acquired interests in 

pre-IPO stock or interests in funds that purported to hold interests in pre-IPO stock.  Max Infinity 

Venture Partners has never been registered with the Commission in any capacity.   

15. Elder Fund Management LLC (“Elder Fund Management”) is a Delaware 

limited liability company formed on or about October 14, 2022, and organized by Sarabella, but 

jointly owned by Cangialosi (40%), Girgis (40%), and Sarabella (20%) and jointly controlled by 

them.  Sarabella is the CEO and managing member of Elder Fund Management and the 

“authorized signer” on its bank accounts.  Elder Fund Management was occasionally identified 

as the “manager” of one of the Elder Funds (Elder 1).  Elder Fund Management also was 

identified as the administrative manager of certain of the Elder Funds.  Elder Fund Management 

has never been registered with the Commission in any capacity.   

16. JJRP United Corp (“JJRP”) is a New York corporation formed on or about 

February 5, 2020.  Its primary business address is in New York, New York, and Sarabella is its 

legal owner and President, but it is beneficially owned and controlled jointly by the Max 

Principals.  From at least August 2021 to August 2022, JJRP was the entity through which the 

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Max Principals operated a boiler room to solicit investors for the Max Infinity Funds and paid 

unregistered sales agents transaction-based compensation.  JJRP has never been registered with 

the Commission in any capacity.   

17. Grand Level Consulting Inc. (“Grand Level”) is a New York corporation 

formed on or about June 3, 2022.  Its business address is in Freeport, New York.  Grand Level is 

legally owned by Lambert as its sole shareholder but during the Relevant Period was functionally 

controlled in whole or in part by the Max Principals.  From about August 2022 to about April 

2023, Grand Level was the entity through which the Max Principals operated a boiler room out 

of New York, New York, to solicit investors for the Max Infinity and Elder Funds and paid 

unregistered sales agents transaction-based compensation.  Grand Level has never been 

registered with the Commission in any capacity. 

18. John S. Cangialosi, Jr. (“Cangialosi”), age 43, resides in Manalapan, New 

Jersey.  Cangialosi is one of the Max Principals.  He beneficially co-owns Max Infinity 

Management and Max Infinity Venture Partners, and is a legal owner of Elder Fund 

Management, with Girgis and Sarabella.  He also owns Relief Defendant JCang1 Corp.  

Cangialosi held licenses in the securities industry for over 23 years.  His FINRA Central 

Registration Depository (“CRD”) number is 3273830.  From 2001 to 2022, Cangialosi was a 

registered representative associated with eight registered broker-dealers, four of which have been 

expelled by FINRA.  Cangialosi’s regulatory record includes multiple disclosed customer 

disputes, two suspensions by FINRA, and agreements with two state regulators that prevent him 

from future registration in those states.  One of Cangialosi’s FINRA suspensions extended from 

September 7, 2021 to June 6, 2022, during the Relevant Period.  On March 6, 2024, Cangialosi 

consented to an indefinite FINRA bar in all capacities for refusing to appear for on-the-record 

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testimony requested by FINRA in connection with its examination of Cangialosi’s outside 

business activities.  Cangialosi has been indicted in this District on conduct substantially 

overlapping the conduct alleged by this Complaint.  See US v. Cangialosi, et al., Case No. 24-

CR-363 (E.D.N.Y. Sept. 10, 2024) (indicting Cangialosi, Girgis, Sarabella, Carini, and Otar on 

conspiracy to commit securities fraud, conspiracy to commit wire fraud, securities fraud, 

investment adviser fraud, and money laundering conspiracy) (the “Criminal Action”).  

19. Peter N. Girgis (“Girgis”), age 43, resides in Staten Island, New York.  Girgis is 

one of the Max Principals.  He beneficially co-owns Max Infinity Management and Max Infinity 

Venture Partners, and is a legal owner of Elder Fund Management, with Cangialosi and 

Sarabella.  He also owns Relief Defendant Girgis Consulting.  Girgis, CRD Number 4520444, 

held licenses in the securities industry for approximately 20 years.  From 2002 until 2022, Girgis 

was associated with eight different registered broker-dealers, four of which have been expelled 

by FINRA.  Girgis is permanently barred from registering in any capacity in the securities 

industry in the state of Illinois.  Girgis’s record includes multiple disclosed customer complaints 

and FINRA suspensions on three separate occasions, including from January 3, 2022 to October 

2, 2022, during the Relevant Period.  On October 7, 2024, Girgis was barred indefinitely and in 

all capacities by FINRA for failing to respond to its requests for information.  Girgis has been 

indicted in the Criminal Action in this District. 

20. Gene “Jerry” Sarabella (“Sarabella”), age 37, resides in Monroe, New Jersey.  

Sarabella is one of the Max Principals.  He is the sole legal owner of Max Infinity Management, 

Max Infinity Venture Partners, and JJRP, but he shares beneficial co-ownership of those entities 

with Cangialosi and Girgis.  Sarabella is a co-owner of Elder Fund Management with Cangialosi 

and Girgis.  Sarabella has never been licensed in any capacity in the securities industry.  With 

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respect to Max Infinity Fund, which was organized while two of the Max Principals were 

suspended by FINRA, Sarabella was held out as the “owner” of the fund, as well as its sole 

member, CEO, President.  In the Max Infinity and Elder Fund securities offering documents, 

Sarabella is identified as the organizer and advisor of the funds and on some occasions as the 

funds’ manager.  Sarabella owns Relief Defendants October United Marketing and Under Par 

Consulting.  Sarabella has been indicted in the Criminal Action in this District. 

21. Enrico A. “Ed” Carini (“Carini”), age 39, resides in Staten Island, New York. 

Carini has never held any licenses in the securities industry.  During the Relevant Period, Carini 

was a sales agent for Max Infinity Fund and Elder Fund and also was in charge of a team of other 

sales agents.  He is the sole owner of Relief Defendant Put Them on the Books Marketing 

through which he received transaction-based compensation in the form of commissions from 

JJRP and Grand Level.  Carini has been indicted in the Criminal Action in this District. 

22. Caner “John” Otar (“Otar”), age 38, resides in Brooklyn, New York.  From 

2011 to 2018, Otar, CRD Number 5628513, was a registered representative associated with six 

broker-dealers registered with the Commission, three of which have been expelled by FINRA.  

In 2015, the Florida Office of Financial Regulation denied Otar’s registration on the grounds of a 

materially false statement on his application.  From about August 2021 to about November 2022, 

Otar was a Max Infinity Fund sales agent and also was in charge of a team of other sales agents.  

Otar owns and/or controls Relief Defendant Perfect Perfection through which he received 

transaction-based compensation in the form of commissions from JJRP and Grand Level.  Otar 

has been indicted in the Criminal Action in this District. 

23. Chester E. “Chett” Scotland (“Scotland”), age 55, resides in Bronx, New York.  

Scotland, CRD Number 2858846, has been licensed in the securities industry since 2000.  From 

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2000 to 2002, and again from 2019 to 2020, Scotland was associated with registered broker-

dealers.  The two registered broker-dealers with which Scotland was associated in 2019 and 2020 

have been expelled by FINRA.  During the Relevant Period, Scotland was a sales agent for Max 

Infinity Fund, and he also is identified as the purported “manager” of most of the Max Infinity 

and Elder Funds.  Since May of 2024, Scotland has been associated with a registered broker-

dealer.  Scotland owns and/or controls Relief Defendant Scotland Omega through which 

Scotland received transaction-based compensation in the form of commissions from JJRP and 

Grand Level.  

24. Franz H. Lambert II (“Lambert”), age 48, resides in Queens, New York.  He is 

the legal owner of Grand Level.  Lambert, CRD Number 4463792, held securities licenses for 

over 20 years.  From 2002 until 2021, Lambert was associated with sixteen registered broker-

dealers, six of which have been expelled by FINRA.  Lambert was suspended by FINRA from 

July 18 to December 17, 2022, during the Relevant Period, and while operating Grand Level.  

During the Relevant Period, he was a sales agent who sold interests in the Max Infinity and Elder 

Funds.  He owns or controls Relief Defendant Franz & Anthony, through which he received 

transaction-based compensation in the form of commissions from JJRP and Grand Level.   

RELIEF DEFENDANTS 

25. JCang1 Corp. (“JCang1”) is a New Jersey corporation formed on or about May 

5, 2021.  Cangialosi is its owner and President.  During the Relevant Period, JCang1 received 

funds that were sourced from principal invested by Max Infinity and Elder Fund investors, but it 

does not have a legitimate claim to those funds.  JCang1 does not appear to have operations and, 

therefore, appears to be a shell company that, during the Relevant Period, functioned primarily to 

receive ill-gotten gains. 

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26. Girgis Consulting, Inc. (“Girgis Consulting”) is a New York corporation 

formed on or about August 30, 2019.  Girgis Consulting’s primary address is in Staten Island, 

New York.  Girgis Consulting is owned and controlled by Girgis, who is its President.  During 

the Relevant Period, Girgis Consulting received funds that were sourced from principal invested 

by Max Infinity and Elder Fund investors, but it does not have a legitimate claim to those funds.  

Girgis Consulting does not appear to have operations and, therefore, appears to be a shell 

company that, during the Relevant Period, functioned primarily to receive ill-gotten gains. 

27. October United Marketing Inc. (“October United”) is a New York corporation 

formed on or about October 20, 2021.  October United’s primary address is in New York, New 

York.  October United is owned and controlled by Sarabella, who is its President.  During the 

Relevant Period, October United received funds that were sourced from principal invested by 

Max Infinity and Elder Fund investors, but it does not have a legitimate claim to those funds.  

October United does not appear to have operations and, therefore, appears to be a shell company 

that, during the Relevant Period, functioned primarily to receive ill-gotten gains. 

28. Under Par Consulting Inc. (“Under Par”) is a New York corporation formed 

on or about April 8, 2022.  Under Par is owned and controlled by Sarabella.  During the Relevant 

Period, Under Par received funds that were sourced from principal invested by Max Infinity and 

Elder Fund investors, but it does not have a legitimate claim to those funds.  Under Par does not 

appear to have operations and, therefore, appears to be a shell company that, during the Relevant 

Period, functioned primarily to receive ill-gotten gains. 

29. Put Them on the Books Marketing Inc. (“PTOTB”) is a New York corporation 

formed on or about March 31, 2021.  PTOTB’s primary address is in Staten Island, New York.  

PTOTB is owned and controlled by Carini, who is its President and sole shareholder.  During the 

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Relevant Period, PTOTB received funds that were sourced from principal invested by Max 

Infinity and Elder Fund investors, but it does not have a legitimate claim to those funds.  PTOTB 

does not appear to have operations and, therefore, appears to be a shell company that, during the 

Relevant Period, functioned primarily to receive ill-gotten gains. 

30. Perfect Perfection, Ltd. (“Perfect Perfection”) is a New York corporation 

formed on or about January 25, 2018.  Perfect Perfection’s primary address is in Brooklyn, New 

York.  Perfect Perfection is owned and controlled, in whole or in part, by Otar.  During the 

Relevant Period, Perfect Perfection received funds that were sourced from principal invested by 

Max Infinity and Elder Fund investors, but it does not have a legitimate claim to those funds.  

Perfect Perfection does not appear to have operations and, therefore, appears to be a shell 

company that, during the Relevant Period, functioned primarily to receive ill-gotten gains. 

31. Scotland Omega Ltd. (“Scotland Omega”) is a New York corporation formed 

on or about October 20, 2021.  Scotland Omega’s primary address is in Bronx, New York.  

Scotland Omega is owned and controlled, in whole or in part, by Scotland.  During the Relevant 

Period, Scotland Omega received funds that were sourced from principal invested by Max 

Infinity and Elder Fund investors, but it does not have a legitimate claim to those funds.  

Scotland Omega does not appear to have operations and, therefore, appears to be a shell 

company that, during the Relevant Period, functioned primarily to receive ill-gotten gains. 

32. Franz & Anthony Holdings Corp. (“Franz & Anthony”) is a New York 

corporation formed on or about October 3, 2018.  Its primary address is in Forest Hills, New 

York.  Franz & Anthony is owned and controlled, in whole or in part, by Lambert.  During the 

Relevant Period, Franz & Anthony received funds that were sourced from principal invested by 

Max Infinity and Elder Fund investors, but it does not have a legitimate claim to those funds.  

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Franz & Anthony does not appear to have operations and, therefore, appears to be a shell 

company that, during the Relevant Period, functioned primarily to receive ill-gotten gains. 

OTHER RELEVANT ENTITIES 

33. Max Infinity Fund, LLC (“Max Infinity Fund”) is a Delaware limited liability 

company, and during the Relevant Period, operated out of office space in New York, New York.  

Max Infinity Fund was formed on or about July 27, 2021, at or near the time that Cangialosi and 

Girgis each consented to suspensions by FINRA.  Sarabella is and was held out as the President 

and purported “owner” of Max Infinity Fund, but at least during the Relevant Period, it was 

jointly controlled and beneficially owned by the Max Principals, each sharing in the proceeds 

from fund investors.  Max Infinity Fund is a master limited liability company that has ten 

“series” (Max 1, Max 1A, Max 1B, Max 2, 3, 4, 5, 6, 7, and 8).  Max Infinity Fund issued 

securities in the form of limited liability company membership interests, but neither the fund, nor 

any of its securities offerings, has been registered with the Commission in any capacity.  Max 

Infinity Fund offering documents claim its membership interests are exempt from registration 

under Section 4(a)(2) of the Securities Act and Regulation D and Section 3(c)(1) or 3(c)(7) of the 

Investment Company Act of 1940 (the “Investment Company Act”).  But Max Infinity Fund has 

not filed a Form D or any other forms or registration documents with the Commission, although 

it filed for access to the Commission’s electronic data gathering, analysis, and retrieval 

(“EDGAR”) system and received central index key (“CIK”) numbers for all of its series, except 

Max 8.  CIK is a unique number the Commission assigns to entities with access to EDGAR. 

34. Elder Fund, LLC (“Elder Fund”) is a Delaware limited liability company, and 

during the Relevant Period, operated out of office space in New York, New York.  It was formed 

on or about October 11, 2022, nine days following the conclusion of Girgis’s FINRA suspension.  

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Sarabella is Elder Fund’s CEO, managing member and “authorized signer” on its bank accounts, 

but at least during the Relevant Period, Elder Fund was jointly controlled and beneficially owned 

by the Max Principals, each sharing in the proceeds from fund investors.  Elder Fund is a master 

limited liability company that has three “series” (Elder 1, 2, and 3).  Elder Fund issued securities 

in the form of limited liability company membership interests, but it is not registered with the 

Commission in any capacity.  Elder Fund offering documents claim its membership interests are 

exempt from registration under Section 4(a)(2) of the Securities Act and Regulation D and 

Section 3(c)(1) of the Investment Company Act.  But Elder Fund has not filed a Form D or any 

other forms or registration documents with the Commission, although it filed for EDGAR access 

and received a CIK number for Elder 1. 

FACTS 

I. THE SECURITIES OFFERINGS 

35. During the Relevant Period, each Defendant directly and/or indirectly offered and 

sold securities in the form of membership interests in ten Max Infinity Funds and three Elder 

Funds, each styled as a “series” of a master fund organized as a limited liability company, raising 

approximately $70 million from over 550 investors throughout the United States.  In so doing, 

each Defendant used means of interstate communication or commerce, including emails, 

telephone calls, and mailings. 

36. Elder Fund, which was formed in the fall of 2022 shortly after the conclusion of 

Girgis’s FINRA suspension, was an extension of Max Infinity Fund, but under a new name.  

37. Each fund purported to hold a beneficial interest -- through an “affiliate” of the 

company -- in pre-IPO stock of a single private company.  

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38. The ten Max Infinity Fund series are: MAX 1, a Series of Max Infinity Fund, 

LLC; MAX 1A, a Series of Max Infinity Fund, LLC; MAX1B, a Series of Max Infinity Fund, 

LLC; MAX 2, a Series of Max Infinity Fund, LLC; MAX 3, a Series of Max Infinity Fund, LLC; 

MAX 4, a Series of Max Infinity Fund, LLC; MAX 5, a Series of Max Infinity Fund, LLC; 

MAX 6, a Series of Max Infinity Fund, LLC; MAX 7, a Series of Max Infinity Fund, LLC; and 

MAX 8, a Series of Max Infinity Fund, LLC. 

39. The three Elder Fund series are: ELDER 1, a Series of ELDER FUND, LLC; 

ELDER 2, a Series of ELDER FUND, LLC; and ELDER 3, a Series of ELDER FUND, LLC. 

40. Max Infinity Fund investors were directed to deposit funds into separate bank 

accounts designated for each fund, but with checks written out to or wires directed to Max 

Infinity Management.  Investors in Elder Fund were directed to deposit funds into separate bank 

accounts designated for each fund, but with all checks written out to or wires directed to 

accounts in the name of the Elder Fund, not the individual fund series.   

41. Once an investor deposited principal to invest in a Max Infinity or Elder Fund, the 

investor’s principal was transferred routinely to, and comingled in, one or more bank accounts 

owned by the Max and Elder Entities and controlled by the Max Principals. 

42. The Max Principals used some of the investors’ principal to purchase purported 

interests in pre-IPO shares or interests in other funds that purport to hold interests in pre-IPO 

shares.  The Max Principals also transferred a portion of investor principal from the Max and 

Elder Entities’ bank accounts to JJRP and Grand Level to pay substantial commissions to 

unregistered sales agents.  The remainder was largely misappropriated by the Max Principals, 

funneled through one or more of the Relief Defendants affiliated with each of the Max 

Principals, and spent on cars, jewelry, and luxury vacations, among other expenditures. 

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A. The Offering Documents 

43. In connection with an investment, Max Infinity and Elder Fund investors typically 

received five offering documents: (1) a Private Placement Memorandum (“PPM”); (2) a Limited 

Liability Company Agreement/Operating Agreement (“LLOA”) (including an investment 

advisory agreement); (3) a Subscription Agreement; (4) a Supplement (a single page that 

purports to supplement/amend/supersede the PPM, LLOA and Subscription Agreement with, 

among other things, defined terms); and (5) a Welcome Letter (a single page that, among other 

things, states that the fund holds shares indirectly through an affiliate, discusses fees, and states 

that none have been deducted) (collectively, the “Offering Documents”). 

44. The Offering Documents totaled more than one hundred pages and were largely 

boilerplate in their substance.  These documents state that there are no “management fees” but 

that the fund is entitled to “carried interest” in the amount of 20% (or less, as negotiated by 

certain investors) of the investors’ profits after an IPO. 

45. The Offering Documents identify Sarabella as the fund’s organizer, advisor, and, 

at times, manager, but Sarabella had no experience in any of those roles.  

46. Although most of the Offering Documents identify Scotland as the fund’s 

manager, Scotland also had no experience as a fund manager and frequently acted at the 

direction of the Max Principals.  Scotland was paid a recurring payment in exchange for his 

services as fund manager.  

47. Upon occasion, certain Elder Fund Offering Documents identify Elder Fund 

Management, which was jointly owned by the Max Principals and formed following the end of 

Girgis’s FINRA suspension, as the fund manager.  

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48. Sarabella’s purported role as the fund organizer, advisor, and, at times, manager, 

and Scotland’s purported role as the fund manager, concealed from investors the management 

and control of the funds by Cangialosi and Girgis, who had prior FINRA and state suspensions in 

the securities industry.       

B. Purported Share Acquisition  

49. The Max Infinity and Elder Funds did not directly purchase pre-IPO stock or 

interests in pre-IPO stock.  Rather, the Max Principals, acting through the Max and Elder 

Entities, acquired interests in pre-IPO stock or purported interests in pre-IPO stock in the name 

of Max Infinity Management and Max Infinity Venture Partners.  The Max Principals advised 

the Max Infinity and Elder Funds on which pre-IPO shares to purchase, where to purchase the 

pre-IPO shares, and at what price. 

50. For the first five series of the Max Infinity Funds, interests in the funds often were 

sold before any purported interest in pre-IPO stock was acquired, despite the Defendants’ and 

their sales agents’ repeated representations to investors that the stock was held “in house.”   

51. Many of the pre-IPO shares for the first five series of the Max Infinity Funds were 

acquired by Max Infinity Management purchasing fund interests issued by other unregistered 

funds.1 

52. At times, Max Infinity Management and Max Infinity Venture Partners acquired 

contractual rights to pre-IPO stock from current or former employees of the pre-IPO companies, 

although those arrangements were often subject to contractual transfer restrictions that could 

prevent the immediate delivery of shares to the funds or investors. 

 
1Some of these unregistered funds are currently subject to a federal court action by the Commission. See SEC v. The 
Pre-IPO Marketplace Inc., et al., 1:24-cv-6886 (E.D.N.Y. Sept. 30, 2024). 

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 C. Hidden Fees Charged to Investors 

53. As scripted by the Defendants, sales agents told investors that the Max Infinity 

and Elder Funds made money only after the investor made money and that the fund made money 

in the form of “carried interest,” usually equal to 20% (or less as negotiated by some investors) 

of the investor’s profits alone (not the principal invested).   

54. This was false.  The primary means by which the Max Infinity and Elder Funds 

made money was through substantial, undisclosed markups on the acquisition price of the 

purported interest in pre-IPO stock.  Max Infinity Management and Max Infinity Venture 

Partners marked up the price it paid (or would pay) to purchase the stock (or interest in funds that 

purported to hold stock) in amounts that generally ranged from 45% to over 100%.  

55. Within the approximately $70 million raised from investors, investors were 

secretly charged approximately $30.9 million in markups: 

Pre-IPO Stock Price Paid by 
Max Infinity 
Management or 
Max Infinity 
Venture 
Partners 
(Including Fees) 

Price Paid by 
Investors to 
Acquire Fund 
Interests 

Markup Range Average Markup 

Company A $2.29 $4.00 75% 75% 
Company B $30.90-$46.80 $77 65-149% 107% 
Company C $11.81-$15.34 $25-30 63-147% 93% 
Company D $43.26-$52.53 $90 71-108% 87% 
Company E $58 $85 47% 47% 
Company F $3.64 $6.50 79% 79% 
Company G $63-$95 $130-$140 45%-122% 73% 
Company H $28 $47.50 70% 70% 

 
56. Over $11 million of these charges was misappropriated by the Max Principals for 

their personal use; approximately $6.8 million of these charges was used to pay substantial 

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commissions to the sales agents; and approximately $2.9 million of these charges was used to 

buy luxury goods such as jewelry and watches.  

II. THE FRAUDULENT SCHEME 

A. Boiler Room Training and High Pressure Sales Tactics  

57. From office space in New York, New York, the Max Principals (acting through 

JJRP and Grand Level) operated their boiler room-style sales floor in which sales agents cold 

called prospective (often elderly) investors from lists that the Max Principals purchased from 

third parties. 

58. The Max Principals ran morning meeting training sessions on high pressure sales 

tactics, which included talking points, role play, and rebuttals if investors resisted sales pitches. 

59. Cangialosi and Girgis taught the sales agents that they are “actors,” and schooled 

the agents on how to create urgency, mislead investors about risk, and fabricate expected profits. 

Sarabella and Lambert attended these training sessions and affirmed and reinforced the lessons. 

60. The Max Principals also provided sales agents with written sales pitches, scripts, 

and rebuttals to aid their deception.  The written pitch for one pre-IPO company, for example, 

introduced investors to the “most anticipated IPO of 2021” for which Max Infinity Fund had a  

“very limited allocation of the stock at a 1.5 billion dollar valuation which translates to $4 per 

share,” and misleadingly asserted that “GoldmanSacks [sic] is set to bring them public in the 

fourth quarter of 2021 at a 6-10 billion valuation putting the stock on opening tick anywhere 

between $16-$20 per share.”  The pitch continued that, “[b]ased on Goldmansacks [sic] IPO 

valuation, your $100,000 investment would be worth $350,000 on the opening tick.”  The Max 

Principals drafted and disseminated similar scripts for the other pre-IPO stocks that the 

Defendants purported to sell.     

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61. Cangialosi drafted a written set of rebuttals for the sales agents to use when a 

prospective investor expressed doubts or concerns about an investment.  These rebuttals included 

talking points with false statements related to prior successes, including making 300% for other 

investors, and offered false promises of risk mitigation.  In addition, the rebuttals encouraged 

investors with real estate to borrow against the property to invest in pre-IPO stock, which the 

rebuttals misleadingly characterize as offered at a “deep discount to the IPO price.”  Lambert 

circulated and distributed these rebuttals to the unregistered sales agents at Grand Level. 

62. Using the training provided by the Max Principals and Lambert, sales agents 

relentlessly pursued investors.  Sales agents used phone number “spoofing” to hide their 

identities and trick investors attempting to screen their calls.  Sales agents also used aliases to 

hide their identities.  For example, Carini often used a fictious name, such as “Richard Oliveri,” 

or the name of other sales agents, and Cangialosi and Girgis had a practice of using Sarabella’s 

name when speaking to investors.   

63. Sales agents, as trained, also often created false urgency by telling investors that 

time was running out to buy into the firm’s supposed limited supply of pre-IPO shares.  Through 

these and similar tactics, sales agents pushed and pressured investors, often aggressively, to 

invest.  

B. Fraudulent Misrepresentations and Omissions 

64. During calls with investors and prospective investors, the Max Principals and the 

sales agents, including Carini, Otar and Scotland, and sales agents acting under the direction of 

Lambert, made false and misleading statements about quick and large profits, little or no risk, 

SEC registration and oversight, no upfront commissions or fees, “in house” shares, the fund’s 

track record of success, and/or low volatility. 

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65. The Max Principals and the sales agents, including Carini, Otar, Scotland, and 

Lambert, knew or were reckless in not knowing, that these statements were false or misleading. 

1. False Statements Regarding Commissions and Hidden Fees 
 
66. Sales agents acting under the control and direction of the Max Principals 

repeatedly misrepresented to investors how they were paid and the fees associated with the 

investment.  In particular, sales agents denied receiving any upfront commissions, and instead 

falsely represented to investors that they were only paid after the investor made a profit.   

67. Sales agents and the Max Principals knew, or were reckless in not knowing, that 

these statements were false or misleading because the sales agents received, and the Max 

Principals received and also paid the sales agents, transaction-based commission payments, often 

ranging from 8% to over 20%, calculated on the principal invested.     

68. The purported compensation structure, where sales agents supposedly received no 

upfront commissions and only got paid when the investors made profits, was emphasized to 

investors as important because it aligned the investor’s interest with the interests of the fund and 

its sales agents.  For example, on or about November 16, 2022, Carini, masquerading under a 

fictious name, told an investor: 

I didn’t get here because of my looks. I got here because I make my clients money. 
You got to understand there is no underlying motive there. If you are not profitable, 
I don’t make a commission. That tells you two things. Number one, I better be 
confident in the company I’m bringing you, and number two, both our interests are 
aligned. And that’s the most important way to enter an investment.  

 
69. This and similar statements made by the sales agents throughout the Relevant 

Period were false.  Carini, like all of the sales agents, was paid a commission for closing the 

investment regardless of how the investment performed.  In addition, investors paid hidden fees 

in the form of substantial markups that ranged from 45% to over 100%.  As the result of the 

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markups paid by investors, the value of the shares would need to substantially increase for 

investors just to break even.   

70. As another example, on or about December 12, 2022, an individual who identified 

himself as Scotland told an investor: 

 We get paid once, once, once the company makes money, once the company goes 
public and they are profitable, that’s how we make our money.  Because when the 
company goes public and they are profitable and you make money in the stock, we 
get 20% of your profits. . . We get 20% of the profits only that’s it. . . . We make 
no money upfront.  Right so that’s why we pick very specific companies that we 
feel are the best largest privately owned companies that are going to be going public 
sooner rather than later because if they don’t go public and you don’t make money, 
neither do we.  
. . .  
If you don’t make money, we can’t make money.  . . . So it would serve no purpose 
just to grab any company out there . . . 
 

71. In addition, in or around September 2021, Scotland falsely represented to an 

investor that Max Infinity Fund did not charge fees until after the IPO, at which time the fund 

would receive 20 percent of the investor’s profits.   

72. The Offering Documents also repeatedly stated that there were no fees.  For 

example, the PPMs and LLOAs for all the funds stated that the manager “will not receive a 

management fee.”  The PPM also stated that the manager will not receive commissions or fees 

for selling fund interests.  Furthermore, the investment advisory agreement attached to the LLOA 

stated that the Advisor “will not collect a management fee,” but that the “Fund shall pay the 

Advisor carried interest pursuant to Section 7.1 of the Operating Agreement.”   

73. While the Offering Documents stated that certain fund fees and expenses “may” 

be retained from their investment “as needed,” when the investor received the Welcome Letter 

and Supplement specific to their investment, they were told in the Welcome Letter that nothing 

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had been deducted from their contribution: “[n]o fees have been deducted” and “[t]he following 

fees have been deducted from your capital contribution: 0 Management Fees.”    

74. There is no disclosure of a potential markup in the Offering Documents for Max 

1, 1A, 1B, 2, 3, 4 or 5.  After those seven series of the Max Infinity Fund, the Offering 

Documents were revised to include boilerplate markup language for Max 6-8 and the Elder 

Funds.  The boilerplate language, however, falsely states that “[t]he funds represented by the 

markup will be used to provide compensation to the individuals who oversee the management of 

the Fund,” when the markup was instead often used to pay sales agent commissions and 

distributed to undisclosed fund control persons, such as Cangialosi and Girgis.   

75. Throughout the Relevant Period, Scotland routinely sent the misleading Offering 

Documents and Welcome Letters to investors.  Scotland knew, or was reckless in not knowing, 

that the representations that “[n]o fees have been deducted” and “[t]he following fees have been 

deducted from your capital contribution: 0 Management Fees” were false because Scotland knew 

that he and others had received a percentage of the principal invested as a commission for the 

sale of the fund interests. 

2. Exaggerated Returns and Short Term Profits 

76. The Max Principals and the sales agents, including Carini, Otar, and Scotland, and 

sales agents acting at the direction of Lambert, falsely promised investors exaggerated returns, 

often exceeding 200% or 300%, without a reasonable basis for believing that these returns were 

achievable.  For example, on or about November 16, 2022, Carini, using an alias, stated to an 

investor:  “I am telling you, you are going to make 180 to 300 percent on the first [tick];” and on 

or about November 30, 2022, Carini told this investor, “I’m going to make you two to three 

times your money on day one.  I’m confident in this.” 

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77. Sales agents also told investors that such extraordinary profits would be achieved 

in the short term.  For example, on or about September 8, 2022, an investor asked Carini, who 

was pitching a pre-IPO investment, if the IPO will be soon.  Carini responded, “Do I think it’s 

gonna be soon? I mean they just, they just hired Goldman Sachs to file their S1. I don’t think, I 

know it’s gonna be soon.”   

78. These and similar false statements were promoted by the Max Principals in the 

scripts and rebuttals provided to the sales agents and in the boiler room training.  For example, in 

rebuttals drafted by Cangialosi and distributed by Lambert on or about June 10, 2022, July 8, 

2022, and October 31, 2022, sales agents were trained to tell investors, “I’m getting you involved 

at a deep discount to it’s [sic] IPO price and by the time it goes live, you’ll be up over 300% . . .”  

And the written scripts provided by the Max Principals to the sales agents communicated a short 

timeframe for the investment to return these profits. 

79. Such deceit, involving exaggerated and short-term returns, was particularly 

egregious given the substantial markups that investors were secretly charged.   

3. False Promises of No Risk or Volatility 

80. Consistent with their training, sales agents routinely misrepresented the risk of 

investing in pre-IPO stock.  The Max Principals trained the sales agents that it was critical to 

convince investors that pre-IPO investments mitigate risk and are shielded from market 

volatility.   

81. For example, in rebuttals drafted by Cangialosi and distributed by Lambert, sales 

agents were trained to tell investors: “Sell some underperforming stocks, mitigate your risk and 

put that behind [pre-IPO stock] which I’m getting you involved at a big discount to it [sic] IPO 

price,” and even advised investors, “pull some money out of your equity line of credit.” 

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82. Based on their training, sales agents misled investors into believing that the 

investment pitched to them had little or no risk.  For example, on or about July 15, 2022, Carini 

told one investor, “the risk of you losing money is literally like jumping out of a basement 

window with an umbrella and a parachute on, there is no way that you can get hurt and lose 

money.”  On or about November 16, 2022, Carini, using an alias, told another investor: 

The other thing that we do give you is peace of mind because, like I said, you are 
not subjected to the market volatility. It doesn’t matter what the market conditions 
are. When you know you invest here with us the 3,000 shares, it’s still worth 
231,000 when you log into your account. You are still going to have 231,000 in the 
account. 

   
83. In some instances, sales agents, including Carini, falsely told investors that their 

principal would be held in escrow.  In addition, the websites for the Max Infinity Fund 

(maxinfinityfund.com) and Elder Fund (theelderfund.com), which the Max Principals controlled, 

Sarabella helped to design, and to which Scotland frequently directed prospective investors, 

falsely stated, “[y]our investment funds will be held with our custodial bank, Valley National 

Bank. . . [w]here you will monitor your account 24/7.”   

4. False Portrayal of Expertise and Track Record of Success 

84. In soliciting investors by telephone and in email communications, sales agents, 

including Carini, Otar, and Scotland, consistent with the boiler room training run by the Max 

Principals and the rebuttals distributed by Lambert, falsely portrayed themselves and those 

associated with the Max Infinity and Elder Funds as private equity experts with a track record of 

success that helped thousands of clients profit handsomely from investing in pre-IPO companies. 

85. Max Infinity’s website, “maxinfinityfund.com,” which Sarabella set up, the Max 

Principals controlled, and Scotland routinely disseminated to investors by email, represented its 

track record by stating that its clients could buy pre-IPO shares of such companies as Palantir, 

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Airbnb, and Facebook, and that it helped thousands of clients “achieve the lifestyle of their 

dreams” through pre-IPO investments.  Similar representations appeared on the Elder Fund 

website, which touted “100+ years of expert market experience,” and under “Our Track Record” 

lists, among other companies, SoFi and Airbnb. 

86. But these and similar representations, appearing on the websites and in statements 

made by the sales agents to prospective investors, were false.  Max Infinity Fund was established 

in the summer of 2021 and Elder Fund was established in the fall of 2022, which post-date the 

IPOs that the funds touted on their websites as their track record.  The Max Principals, through 

the Max and Elder Entities, JJRP, and Grand Level, hired largely inexperienced sales agents.  

And since the funds’ inception, only one pre-IPO company that the Defendants purported to sell 

has held an IPO, which resulted in significant losses to Max Infinity and Elder Fund investors.   

87. Scotland directed prospective investors to the misleading Max Infinity and Elder 

Fund websites by email on numerous occasions, including, but not limited to, on or about 

February 9, 2022, April 1, 2022, December 1, 2022, and March 15, 2023.   

88. These and similar false statements regarding the funds’ track record of success 

were promoted by the Max Principals in the scripts and rebuttals provided to the sales agents and 

in the boiler room training.  For example, in rebuttals drafted by Cangialosi and distributed by 

Lambert, sales agents were trained to tell investors, “you’d be doing much better . . . had you 

taken my advice and bought the Airbnb and made over 300% on your money” and “give me a 

shot and let me show you at 300% just like I did for my other clients who did the Airbnb with 

me.” 

89. The Max Principals, Carini, Otar, Scotland, and Lambert knew or were reckless in 

not knowing that these representations were false and misleading because each was employed by 

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Max Infinity Fund from its inception and knew that none of the pre-IPO companies that the fund 

purported to sell had gone public and none of Max Infinity Fund’s investors had made a profit.  

5. False Representation of SEC Registration 

90. The Max Principals, and the sales agents, including Carini, Otar, and Scotland, 

repeatedly, and falsely, represented to investors that the Max Infinity and Elder Funds are 

registered with the SEC.  Some investors were even told that, as the result of registration, the 

Commission conducted regular oversight and examination of the company’s books and records.  

91. For example, on or about November 14, 2022, Carini, using an alias, told an 

investor: 

The fund itself, the LLC fund, everything is filed with the SEC. So in order 
to file, they -- they go through all the books, the accounting, the bank 
statements, everything you could think of --. . . before they even allow a 
fund to be operational.  . . . And like I said, they come in every quarter and 
make sure that everything is up to date. 

 
92. In addition, Scotland and the sales agents, including Otar and Carini, directed 

investors to a privately-run website, “sec.report,” purporting it to be an authentic SEC webpage 

which falsely presented the Max Infinity Funds as registered with the SEC.  Girgis and Sarabella 

supplied the phony website link to sales agents, including Carini and Otar, for purposes of 

sending it to prospective investors. 

93. In or around September 2021, Scotland falsely represented to an investor that 

Max Infinity Fund was registered with the SEC.  In addition, on multiple occasions, including 

but not limited to, on or about January 6, 2022, February 22, 2022, and May 3, 2022, Scotland 

emailed a misleading link to the “sec.report” website to prospective investors, referring to it as 

an “SEC registration link” and “SEC Verification Link.”  

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94. Similarly, on or about August 11, 2021, Otar sent an “sec.report” link by email to 

a prospective investor referring to it as the “SEC FILING.” 

95. The Max Principals, Carini, Otar, and Scotland knew or were reckless in not 

knowing that Max Infinity Fund was not registered with the SEC and the link provided was 

misleading because it was not a government website.  These facts were pointed out by some 

prospective investors.  For example, on or about April 8, 2022, an investor stated in an email to 

Scotland, “You realize this is not the official site of the SEC plus it shows your fund has not 

filled [sic] any documents with the SEC. Not only that, but your fund does not appear on 

Investor.gov AND I even went to cross check your CIK # with the EDGAR filings look-up, and 

again it does not show up.”  Similarly, on or about January 6, 2022, another prospective investor 

stated in an email to Scotland that he found no information on Max Infinity Fund on the 

“sec.gov” website.  In addition, on or about January 28, 2022, another investor stated in an email 

to Scotland that “sec.report” is “not an official government website,” and Scotland forwarded the 

email to Sarabella.     

6. False Statements Regarding Holding Shares “In House” 

96. Offering Documents, the funds’ websites, and the sales agents’ pitches falsely 

represented to investors how the funds acquired and controlled purported pre-IPO shares of 

stock.   

97. For example, sales agents, including Carini and Otar, falsely told investors that 

shares were held “in house” or “in inventory,” and the Max Principals trained sales agents to 

emphasize this point as part of the rebuttals if a prospective investor questioned the price of the 

shares or suggested that they could get the shares cheaper elsewhere.   

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98. Similarly, the Max Infinity and Elder Funds’ websites, which the Max Principals 

controlled, and Scotland routinely disseminated, state that “we’ll give you exposure to in house-

shares of all available pre-IPO opportunities.”  

99. In addition, the Offering Documents for Max 1, 1A, 1B, 2, 3, 4, and 5, which the 

Max Principals controlled, and Scotland routinely disseminated, falsely state that pre-IPO shares 

are purchased directly from the pre-IPO company at a price determined by the pre-IPO company.  

100. In many instances, however, investors were sold fund interests that represented 

shares of pre-IPO stock before the purported shares or interests in shares of the stock were 

acquired.  Moreover, for at least Max 1, 1A, 1B, 2, 3, 4, and 5, the funds did not acquire shares 

directly, but instead invested in another unregistered fund that purported to own pre-IPO stock.  

This fund-of-funds arrangement was not disclosed to investors, and it resulted in investors 

unknowingly assuming additional risk and cost. 

7. Concealment of Fund Ownership and Control 

101. Sarabella was held out to investors as Max Infinity Fund’s owner, organizer, 

investment adviser and, at times, manager, but he had no prior industry experience in these roles.  

Similarly, the Offering Documents for most of the Max Infinity and Elder Funds held Scotland 

out as the funds’ “manager,” but Scotland had no prior experience in this role and largely acted 

at the direction of the Max Principals.  

102. Cangialosi and Girgis had extensive industry experience but were suspended by 

FINRA during the first year of Max Infinity Fund’s existence and also had prior regulatory 

suspensions and disciplinary action.  Holding Sarabella and Scotland out in these roles served to 

conceal the control that Cangialosi and Girgis exercised over the funds.  

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103. Each Defendant knew that Cangialosi, Girgis, and Sarabella were jointly in 

charge of the funds. 

104. Yet, while training the sales agents to tout the management of the funds as 

experienced and successful, and participating with the sales agents in making these pitches to 

investors, Defendants in most cases did not disclose to investors the identity of the control 

persons of the funds. 

8. False Appearance of Corporate Structure and Oversight 

105. The Offering Documents describe a fund that has structure, management, and 

oversight.  This too was a fiction.     

106. The Offering Documents describe a structure in which corporate records are 

maintained and fund assets and expenses are accounted for in a manner expected of multi-million 

dollar investment funds.  In truth, fund assets were comingled, fund expenses were combined 

with those of other funds and fund series without any tracking or accounting, and standard 

corporate records were not maintained.   

107. Rather, the corporate records of the funds were reflected in a couple of 

handwritten notebooks maintained by Sarabella, at least one of which has been destroyed.   

III. UNREGISTERED SECURITIES OFFERINGS AND BROKERS 

108. Neither the funds nor their securities offerings were registered with the 

Commission in any capacity, and the sales agents were not associated with a registered broker-

dealer to sell interests in the Max Infinity and Elder Funds.  While all but three of the Max 

Infinity and Elder Funds have CIK numbers and EDGAR access, none of these funds made any 

filings with the Commission.  

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109. Max Infinity and Elder Fund Offering Documents claim exemption from 

registration under Securities Act Section (4)(a)(2) and Regulation D, although none of the funds 

filed a Form D.  All of the funds engaged in general solicitation, however.   

110. Max Infinity and Elder Funds relied almost exclusively on investor self-

certification of accredited investor status, but the Defendants did not take steps to verify 

representations made on accredited investor questionnaires.   

111. Moreover, the Max Principals, Carini, Otar, Scotland, and Lambert were not 

registered as broker-dealers nor associated with a registered broker-dealer to sell interests in the 

Max Infinity and Elder Funds.  But each of them received transaction-based compensation in 

exchange for successfully soliciting investors for the funds and, in the case of the Max Principals 

and Lambert, also controlled the sales force that was receiving this form of compensation. 

112. The sales agents in the boiler rooms were not associated with a registered entity 

for purposes of selling interests in the Max Infinity and Elder Funds, and also received 

transaction-based compensation for successfully soliciting fund investors. 

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

(All Defendants) 
 

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

paragraphs 1 through 112. 

114. Defendants, 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, (i) knowingly or recklessly have employed one or more 

devices, schemes, or artifices to defraud, (ii) knowingly, recklessly, or negligently have obtained 

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

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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 (iii) knowingly, recklessly, or negligently 

have engaged in one or more transactions, practices, or courses of business which operated or 

would operate as a fraud or deceit upon the purchaser. 

115. By reason of the foregoing, Defendants, directly or indirectly, singly or in concert, 

have 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 

(All Defendants) 
 

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

paragraphs 1 through 112. 

117. Defendants, 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, knowingly or 

recklessly have (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. 

118. By reason of the foregoing, Defendants directly or indirectly, singly or in concert, 

have 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]. 

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THIRD CLAIM FOR RELIEF 
Violations of Advisers Act Sections 206(1) and (2) 

(Max Infinity Management, Max Infinity Venture Partners, Elder Fund Management, 
Cangialosi, Girgis, Sarabella, and Scotland)  

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

paragraphs 1 through 112. 

120. Max Infinity Management, Max Infinity Venture Partners, Elder Fund 

Management, Cangialosi, Girgis, Sarabella, and Scotland were investment advisers under 

Advisers Act Section 202(11) [15 U.S.C. § 80b-2(11)] because, “for compensation,” they each 

“engage[d] in the business of advising others . . . as to the value of securities or as to the 

advisability of investing in, purchasing, or selling securities.” 

121. Sarabella is identified in the Offering Documents as the advisor to each of the 

fund series in exchange for carried interest as payment for his investment advisory services.  As 

de facto co-owners and controllers of the Max Infinity and Elder Funds, Cangialosi and Girgis 

jointly performed, for compensation, investment adviser functions for the funds alongside 

Sarabella, regardless of who was identified in the Offering Documents.  The Max Principals 

advised the Max Infinity and Elder Funds on which pre-IPO stock to purchase, where to 

purchase the purported interests in pre-IPO stock, and at what price.  In addition, the Max 

Principals advised the Max Infinity and Elder Funds as to what proceeds would be used to pay 

for these purchases.  Scotland was held out as the manager of most of the Max Infinity and Elder 

Funds and received recurring payments in exchange for his fund manager role. 

122. The Max and Elder Entities also performed the functions of an investment adviser 

for the funds, including through their involvement in purchasing decisions and purchasing pre-

IPO shares purportedly for the benefit of the Max Infinity and Elder Funds, even if they had no 

formal role as organizer, investment adviser, or manager for a particular fund. 

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123. Max Infinity Management, Max Infinity Venture Partners, Elder Fund 

Management, Cangialosi, Girgis, Sarabella, and Scotland had an adviser-client relationship with 

and, therefore, owed a fiduciary duty to the Max Infinity and Elder Funds. 

124. During the Relevant Period, while acting as an investment adviser, Max Infinity 

Management, Max Infinity Venture Partners, Elder Fund Management, Cangialosi, Girgis, 

Sarabella, and Scotland, by use of the mails or any means or instrumentality of interstate 

commerce, directly or indirectly, (i) employed a device, scheme, or artifice to defraud a client or 

prospective client; and (ii) engaged in transactions, practices, or courses of business that operated 

as a fraud or deceit upon a client or prospective client. 

125. By reason of the foregoing, Max Infinity Management, Max Infinity Venture 

Partners, Elder Fund Management, Cangialosi, Girgis, Sarabella, and Scotland directly or 

indirectly, singly or in concert, have violated and, unless enjoined, will again violate Advisers 

Act Sections 206(1) and 206(2) [15 U.S.C. §§ 80b-6(1) and 80b-6(2)]. 

FOURTH CLAIM FOR RELIEF 
Violations of Advisers Act Section 206(4) and Rule 206(4)-8 Thereunder 

(Max Infinity Management, Max Infinity Venture Partners, Elder Fund Management, 
Cangialosi, Girgis, Sarabella, and Scotland)  

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

paragraphs 1 through 112 and paragraphs 120 through 123. 

127. The Offering Documents for the Max Infinity and Elder Funds state that the 

purpose of each fund is to “invest in Portfolio Company Securities” and that each fund relies on 

the exception in either Section 3(c)(1) or (c)(7) of the Investment Company Act. 

128. Max Infinity Management, Max Infinity Venture Partners, Elder Fund 

Management, Cangialosi, Girgis, Sarabella, and Scotland were investment advisers under 

Advisers Act Section 202(11) [15 U.S.C. § 80b-2(11)] and had an adviser-client relationship 

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with and therefore owed a fiduciary duty to the Max Infinity and Elder Funds, which were 

pooled investment vehicles as defined in Rule 206(4)-8(b) [17 C.F.R. § 275.206(4)-8(b)]. 

129. While acting as investment advisers, Max Infinity Management, Max Infinity 

Venture Partners, Elder Fund Management, Cangialosi, Girgis, Sarabella, and Scotland, by use 

of the mails or any means or instrumentality of interstate commerce, directly or indirectly, 

knowingly, recklessly, or negligently: (i) made one or more untrue statements of 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, to any investor or 

prospective investor in the pooled investment vehicle; and/or (ii) engaged in any act, practice, or 

course of business which is fraudulent, deceptive, or manipulative, with respect to any investor 

or prospective investor in the pooled investment vehicle. 

130. By reason of the foregoing, Max Infinity Management, Max Infinity Venture 

Partners, Elder Fund Management, Cangialosi, Girgis, Sarabella, and Scotland, directly or 

indirectly, singly or in concert, have violated and, unless enjoined, will again violate Advisers 

Act Section 206(4) [15 U.S.C. § 80b-6(4)] and Rule 206(4)-8 thereunder [17 C.F.R. 

§ 275.206(4)-8]. 

FIFTH CLAIM FOR RELIEF 
Violations of Securities Act Sections 5(a) and (c) 

(All Defendants) 
 

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

paragraphs 1 through 112. 

132. During the Relevant Period, Defendants, directly or indirectly, singly or in 

concert: (a) made use of the means or instruments of transportation or communication in 

interstate commerce or of the mails to sell securities through the use or medium of a prospectus 

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or otherwise; (b) for the purpose of delivery after sale, carried or caused to be carried through the 

mails or in interstate commerce, by means or instruments of transportation, securities; and/or (c) 

made use of means or instruments of transportation or communication in interstate commerce or 

of the mails to offer to sell securities through the use or medium of a prospectus or otherwise.   

133. No registration statement was filed or was in effect with the Commission for any 

of the securities offered or sold by the Defendants. 

134. By reason of the foregoing, Defendants, directly or indirectly, singly or in concert, 

have violated and, unless enjoined, will again violate Securities Act Sections 5(a) and 5(c) [15 

U.S.C. §§ 77e(a) and 77e(c)]. 

SIXTH CLAIM FOR RELIEF 
Violations of Exchange Act Section 15(a)(1) 

(JJRP, Grand Level, Cangialosi, Girgis, Sarabella, Carini, Otar, Scotland, and Lambert) 
 

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

paragraphs 1 through 112.  

136. JJRP, Grand Level, Cangialosi, Girgis, Sarabella, Carini, Otar, Scotland, and 

Lambert, while not registered with the Commission as a broker or dealer or associated with a 

registered broker or dealer, made use of the mails or other means or instrumentality of interstate 

commerce to effect transactions in, or to induce or attempt to induce the purchase or sale of, 

securities other than exempted securities or commercial paper, bankers’ acceptances, or 

commercial bills. 

137. By reason of the foregoing, JJRP, Grand Level, Cangialosi, Girgis, Sarabella, 

Carini, Otar, Scotland, and Lambert, directly or indirectly, singly or in concert, have violated 

and, unless enjoined, will again violate Exchange Act Section 15(a)(1) [15 U.S.C. § 78o(a)]. 

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SEVENTH CLAIM FOR RELIEF 
Aiding and Abetting Violations of Securities Act Section 17(a) 

In the Alternative 
(JJRP, Grand Level, Cangialosi, Girgis, Sarabella, Carini, Otar, Scotland, and Lambert) 

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

paragraphs 1 through 112 and paragraphs 114 through 115. 

139. As alleged herein, the Max Principals, the Max and Elder Entities, JJRP, and 

Grand Level violated Securities Act Section 17(a) [15 U.S.C. § 77q(a)]. 

140. Carini, Otar, Scotland, and Lambert knowingly or recklessly provided substantial 

assistance to the violations of Securities Act Section 17(a) [15 U.S.C. § 77q(a)] by the Max 

Principals, the Max and Elder Entities, JJRP, and Grand Level. 

141. Moreover, as alleged herein, Cangialosi, Girgis, the Max and Elder Entities, JJRP, 

and Grand Level violated Securities Act Section 17(a) [15 U.S.C. § 77q(a)]. 

142. Sarabella knowingly or recklessly provided substantial assistance to the violations 

of Securities Act Section 17(a) [15 U.S.C. § 77q(a)] by Cangialosi, Girgis, the Max and Elder  

Entities, JJRP, and Grand Level. 

143. Furthermore, as alleged herein, the Max and Elder Entities, JJRP, and Grand 

Level violated Securities Act Section 17(a) [15 U.S.C. § 77q(a)]. 

144. Cangialosi and Girgis knowingly or recklessly provided substantial assistance to 

the violations of Securities Act Section 17(a) [15 U.S.C. § 77q(a)] by the Max and Elder Entities, 

JJRP, and Grand Level. 

145. Also, as alleged herein, the Max Principals and the Max and Elder Entities 

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

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146. JJRP and Grand Level knowingly or recklessly provided substantial assistance to 

the violations of Securities Act Section 17(a) [15 U.S.C. § 77q(a)] by the Max Principals and the 

Max and Elder Entities. 

147. By reason of the foregoing, JJRP, Grand Level, Cangialosi, Girgis, Sarabella, 

Carini, Otar, Scotland, and Lambert are liable for aiding and abetting violations of Securities Act 

Section 17(a), and unless enjoined, will again aid and abet these violations. 

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

In the Alternative 
(JJRP, Grand Level, Cangialosi, Girgis, Sarabella, Carini, Otar, Scotland, and Lambert) 

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

paragraphs 1 through 112 and paragraphs 117 through 118. 

149. As alleged herein, the Max Principals, the Max and Elder Entities, JJRP, and 

Grand Level violated Exchange Act Section 10(b) [15 U.S.C. § 78j(b)] and Rule 10b-5 

thereunder [17 C.F.R. § 240.10b-5]. 

150. Carini, Otar, Scotland, and Lambert knowingly or recklessly provided substantial 

assistance to the violations of Exchange Act Section 10(b) [15 U.S.C. § 78j(b)] and Rule 10b-5 

thereunder [17 C.F.R. § 240.10b-5] by the Max Principals, the Max and Elder Entities, JJRP, and 

Grand Level. 

151. Moreover, as alleged herein, Cangialosi, Girgis, the Max and Elder Entities, JJRP, 

and Grand Level violated Exchange Act Section 10(b) [15 U.S.C. § 78j(b)] and Rule 10b-5 

thereunder [17 C.F.R. § 240.10b-5]. 

152. Sarabella knowingly or recklessly provided substantial assistance to the violations 

of Exchange Act Section 10(b) [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 

240.10b-5] by Cangialosi, Girgis, the Max and Elder Entities, JJRP, and Grand Level. 

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153. Furthermore, as alleged herein, the Max and Elder Entities, JJRP, and Grand 

Level violated Exchange Act Section 10(b) [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 

C.F.R. § 240.10b-5]. 

154. Cangialosi and Girgis knowingly or recklessly provided substantial assistance to 

the violations of Exchange Act Section 10(b) [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 

C.F.R. § 240.10b-5] by the Max and Elder Entities, JJRP, and Grand Level. 

155. Also, as alleged herein, the Max Principals and the Max and Elder Entities 

violated Exchange Act Section 10(b) [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. 

§ 240.10b-5]. 

156. JJRP and Grand Level knowingly or recklessly provided substantial assistance to 

the violations of Exchange Act Section 10(b) [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 

C.F.R. § 240.10b-5] by the Max Principals and the Max and Elder Entities. 

157. By reason of the foregoing, JJRP, Grand Level, Cangialosi, Girgis, Sarabella, 

Carini, Otar, Scotland, and Lambert are liable for aiding and abetting violations of Exchange Act 

Section 10(b) [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5], and 

unless enjoined, will again aid and abet these violations.  

NINTH CLAIM FOR RELIEF 
Aiding and Abetting Violations of Advisers Act Sections 206(1) and (2) 

(JJRP, Grand Level, Carini, Otar, and Lambert) 
 
158. The Commission re-alleges and incorporates by reference here the allegations in 

paragraphs 1 through 112 and paragraphs 120 through 125. 

159. Max Infinity Management, Max Infinity Venture Partners, Elder Fund 

Management, Cangialosi, Girgis, Sarabella, and Scotland violated Advisers Act Sections 206(1) 

and 206(2) [15 U.S.C. §§ 80b-6(1) and 80b-6(2)]. 

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160. JJRP, Grand Level, Carini, Otar, and Lambert knowingly or recklessly provided 

substantial assistance to the violations by Max Infinity Management, Max Infinity Venture 

Partners, Elder Fund Management, Cangialosi, Girgis, Sarabella, and Scotland.  

161. As a result of the forgoing, JJRP, Grand Level, Carini, Otar, and Lambert are 

liable for aiding and abetting violations of Advisers Act Sections 206(1) and 206(2) [15 U.S.C. 

§§ 80b-6(1) and 80b-6(2)], and unless enjoined, will again aid and abet these violations. 

TENTH CLAIM FOR RELIEF 
Aiding and Abetting Violations of Advisers Act Sections 206(1) and (2) 

In the Alternative 
(Cangialosi, Girgis, Sarabella, and Scotland) 

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

paragraphs 1 through 112 and paragraphs 120 through 125. 

163. Max Infinity Management, Max Infinity Venture Partners, and Elder Fund 

Management violated Advisers Act Sections 206(1) and 206(2) [15 U.S.C. §§ 80b-6(1) and 80b-

6(2)]. 

164. Cangialosi, Girgis, Sarabella, and Scotland knowingly or recklessly provided 

substantial assistance to the violations by Max Infinity Management, Max Infinity Venture 

Partners, and Elder Fund Management.  

165. As a result of the forgoing, Cangialosi, Girgis, Sarabella, and Scotland are liable 

for aiding and abetting violations of Advisers Act Sections 206(1) and 206(2) [15 U.S.C. §§ 80b-

6(1) and 80b-6(2)], and unless enjoined, will again aid and abet these violations. 

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ELEVENTH CLAIM FOR RELIEF 
Aiding and Abetting Violations of Advisers Act Section 206(4)  

and Rule 206(4)-8 Thereunder 
(JJRP, Grand Level, Carini, Otar, and Lambert) 

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

paragraphs 1 through 112, paragraphs 120 through 123, and paragraphs 127 through 130. 

167. Max Infinity Management, Max Infinity Venture Partners, Elder Fund 

Management, Cangialosi, Girgis, Sarabella, and Scotland violated Advisers Act Section 206(4) 

[15 U.S.C. § 80b-6(4)] and Rule 206(4)-8 thereunder [17 C.F.R. § 275.206(4)-8]. 

168. JJRP, Grand Level, Carini, Otar, and Lambert knowingly or recklessly provided 

substantial assistance to Max Infinity Management, Max Infinity Venture Partners, Elder Fund 

Management, Cangialosi, Girgis, Sarabella, and Scotland with respect to their violations of 

Advisers Act Section 206(4) [15 U.S.C. § 80b-6(4)] and Rule 206(4)-8 thereunder [17 C.F.R. § 

275.206(4)-8].  

169. As a result of the forgoing, JJRP, Grand Level, Carini, Otar, and Lambert are 

liable for aiding and abetting violations of Advisers Act Section 206(4) [15 U.S.C. § 80b-6(4)] 

and Rule 206(4)-8 thereunder [17 C.F.R. § 275.206(4)-8], and unless enjoined, will again aid and 

abet these violations. 

TWELFTH CLAIM FOR RELIEF 
Aiding and Abetting Violations of Advisers Act Section 206(4)  

and Rule 206(4)-8 Thereunder 
In the Alternative 

(Cangialosi, Girgis, Sarabella, and Scotland) 
 

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

paragraphs 1 through 112, paragraphs 120 through 123, and paragraphs 127 through 130. 

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171. Max Infinity Management, Max Infinity Venture Partners, and Elder Fund 

Management violated Advisers Act Section 206(4) [15 U.S.C. § 80b-6(4)] and Rule 206(4)-8 

thereunder [17 C.F.R. § 275.206(4)-8]. 

172. Cangialosi, Girgis, Sarabella, and Scotland knowingly or recklessly provided 

substantial assistance to Max Infinity Management, Max Infinity Venture Partners, and Elder 

Fund Management with respect to their violations of Advisers Act Section 206(4) [15 U.S.C. 

§ 80b-6(4)] and Rule 206(4)-8 thereunder [17 C.F.R. § 275.206(4)-8].  

173. As a result of the forgoing, Cangialosi, Girgis, Sarabella, and Scotland are liable 

for aiding and abetting violations of Advisers Act Section 206(4) [15 U.S.C. § 80b-6(4)] and 

Rule 206(4)-8 thereunder [17 C.F.R. § 275.206(4)-8], and unless enjoined, will again aid and 

abet these violations. 

THIRTEENTH CLAIM FOR RELIEF 
Aiding and Abetting Violations of Exchange Act Section 15(a)(1) 

(Max Infinity Management, Max Infinity Venture Partners, and Elder Fund Management)  
 
174. The Commission re-alleges and incorporates by reference here the allegations in 

paragraphs 1 through 112 and paragraphs 136 through 137. 

175. JJRP, Grand Level, Cangialosi, Girgis, Sarabella, Carini, Otar, Scotland, and 

Lambert violated Exchange Act Section 15(a)(1) [15 U.S.C. § 78o(a)] in selling the Max Infinity 

and Elder Funds. 

176. Max Infinity Management, Max Infinity Venture Partners, and Elder Fund 

Management knowingly or recklessly provided substantial assistance to the Exchange Act 

Section 15(a)(1) violations by JJRP, Grand Level, Cangialosi, Girgis, Sarabella, Carini, Otar, 

Scotland, and Lambert. 

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177. By reason of the foregoing, Max Infinity Management, Max Infinity Venture 

Partners, and Elder Fund Management are liable for aiding and abetting violations of Section 

15(a)(1) [15 U.S.C. § 78o(a)], and unless enjoined, will again aid and abet these violations. 

FOURTEENTH CLAIM FOR RELIEF 
Aiding and Abetting Violations of Exchange Act Section 15(a)(1) 

In the Alternative 
(Cangialosi, Girgis, Sarabella, and Lambert) 

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

paragraphs 1 through 112 and paragraphs 136 through 137. 

179. JJRP, Grand Level, Carini, Otar, Scotland, and Lambert violated Exchange Act 

Section 15(a)(1) [15 U.S.C. § 78o(a)] in selling the Max Infinity and Elder Funds. 

180. Cangialosi, Girgis, and Sarabella knowingly or recklessly provided substantial 

assistance to the Exchange Act Section 15(a)(1) violations by JJRP, Grand Level, Carini, Otar, 

Scotland, and Lambert.  Lambert knowingly or recklessly provided substantial assistance to the 

Exchange Act Section 15(a)(1) violations by JJRP, Grand Level, Carini, Otar, and Scotland. 

181. By reason of the foregoing, Cangialosi, Girgis, Sarabella, and Lambert are liable 

for aiding and abetting violations of Section 15(a)(1) [15 U.S.C. § 78o(a)], and unless enjoined, 

will again aid and abet these violations. 

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

Under Section 20(a) of the Exchange Act 
In the Alternative 

(Cangialosi, Girgis, Sarabella, and Lambert) 
 

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

paragraphs 1 through 112 and paragraphs 117 through 118. 

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183. As alleged above, the Max and Elder Entities, JJRP, and Grand Level violated 

Exchange Act Section 10(b) [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 

240.10(b)-5]. 

184. At all relevant times, Cangialosi, Girgis, and Sarabella were control persons of the 

Max and Elder Entities, JJRP and Grand Level and were culpable participants in the violations 

by the Max and Elder Entities, JJRP, and Grand Level of Exchange Act Section 10(b) [15 U.S.C. 

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

185. By reason of the foregoing, Cangialosi, Girgis, and Sarabella are liable as control 

persons under Section 20(a) of the Exchange Act [15 U.S.C. § 78t(a)] for violations of Exchange 

Act Section 10(b) [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10(b)-5] by 

the Max and Elder Entities, JJRP, and Grand Level. 

186. At all relevant times, Lambert was a control person of Grand Level and was a 

culpable participant in Grand Level’s violations of Exchange Act Section 10(b) [15 U.S.C. § 

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

187. By reason of the foregoing, Lambert is liable as a control person under Section 

20(a) of the Exchange Act [15 U.S.C. § 78t(a)] for violations of Exchange Act Section 10(b) [15 

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

SIXTEENTH CLAIM FOR RELIEF 
Violations of Exchange Act Section 15(a)(1) 

Under Section 20(a) of the Exchange Act 
In the Alternative 

(Cangialosi, Girgis, Sarabella, and Lambert) 

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

paragraphs 1 through 112 and paragraphs 136 through 137. 

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189. As alleged above, JJRP and Grand Level violated Exchange Act Section 15(a)(1) 

[15 U.S.C. § 78o(a)]. 

190. At all relevant times, Cangialosi, Girgis, and Sarabella were control persons of 

JJRP, and Grand Level and were culpable participants in the violations of JJRP and Grand Level 

of Exchange Act Section 15(a)(1) [15 U.S.C. § 78o(a)].  

191. By reason of the foregoing, Cangialosi, Girgis, and Sarabella are liable as control 

persons under Section 20(a) of the Exchange Act [15 U.S.C. § 78t(a)] for violations of Exchange 

Act Section 15(a)(1) [15 U.S.C. § 78o(a)] by JJRP and Grand Level. 

192. At all relevant times, Lambert was a control person of Grand Level and was a 

culpable participant in Grand Level’s violations of Exchange Act Section 15(a)(1) [15 U.S.C. § 

78o(a)]. 

193. By reason of the foregoing, Lambert is liable as a control person under Section 

20(a) of the Exchange Act [15 U.S.C. § 78t(a)] for violations of Exchange Act Section 15(a)(1) 

[15 U.S.C. § 78o(a)] by Grand Level. 

SEVENTEENTH CLAIM FOR RELIEF 
Disgorgement and Prejudgment Interest Against the Relief Defendants 

Under Section 21(d) of the Exchange Act 
(JCang1 Corp., Girgis Consulting, Inc., October United Marketing Inc., Under Par 

Consulting Inc., Put Them on the Books Marketing Inc., Perfect Perfection, Ltd., Scotland 
Omega Ltd., and Franz & Anthony Holdings Corp.) 

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

paragraphs 1 through 112, paragraphs 114 through 115, paragraphs 117 through 118, paragraphs 

120 through 125, paragraphs 127 through 130, paragraphs 132 through 134, paragraphs 136 

through 137, paragraphs 139 through 147, paragraphs 149 through 157, paragraphs 159 through 

161, paragraphs 163 through 165, paragraphs 167 through 169, paragraphs 171 through 173, 

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paragraphs 175 through 177, paragraphs 179 through 181, paragraphs 183 through 187, and 

paragraphs 189 through 193. 

195. Relief Defendants JCang1, Girgis Consulting, October United, Under Par, 

PTOTB, Perfect Perfection, Scotland Omega, and Franz & Anthony each received, directly or 

indirectly, funds or other property, which are either the proceeds of, or are traceable to the 

proceeds of, unlawful activities alleged in this Complaint to which they have no legitimate claim. 

196. By reason of the foregoing, it would be inequitable for Relief Defendants to retain 

the proceeds from violations of the federal securities laws and such proceeds should be disgorged 

pursuant to Exchange Act Sections 21(d) [15 U.S.C. §§ 78u(d)]. 

PRAYER FOR RELIEF 

 WHEREFORE, the Commission requests that the Court enter a Final Judgment: 

I. 

 In a form consistent with Rule 65(d) of the Federal Rules of Civil Procedure, 

permanently restraining and enjoining Defendants, their agents, servants, employees, and 

attorneys and all persons in active concert or participation with any of them, who receive actual 

notice of the judgment by personal service or otherwise, from violating, directly or indirectly: 

(1) Securities Act Section 17(a) [15 U.S.C. § 77q(a)]; 

(2) Exchange Act Section 10(b) [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder 

[17 C.F.R. § 240.10(b)-5]; 

(3) Advisers Act Sections 206(1), 206(2), and 206(4) [15 U.S.C. §§ 80b-6(1), (2), 

and (4)] and Rule 206(4)-8 thereunder [17 C.F.R. § 275.206(4)-8]; 

(4) Securities Act Sections 5(a) and 5(c) [15 U.S.C. § 77e(a) and 77e(c)]; and 

(5) Exchange Act Section 15(a)(1) [15 U.S.C. § 78o]; 

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II. 

 Ordering Defendants to disgorge, where appropriate, on a joint and several basis, the ill-

gotten gains they received as a result of the violations alleged herein and to pay prejudgment 

interest thereon pursuant to Exchange Act Sections 21(d)(3), (5), and (7) [15 U.S.C. §§ 

78u(d)(3), (5), and (7)]; 

III. 

 Ordering Defendants to each pay a civil money penalty pursuant to Securities Act Section 

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

Act Section 209 [15 U.S.C. § 80b-9];  

IV. 

 Ordering that Cangialosi, Girgis, and Sarabella be barred from serving as an officer or 

director of a public issuer pursuant to Section 20(e) of the Securities Act [15 U.S.C. § 77t(e)] and 

Section 21(d)(2) of the Exchange Act [15 U.S.C. § 78u(d)(2)]; 

V. 

 Permanently restraining and enjoining Cangialosi, Girgis, Sarabella, Carini, Otar, 

Scotland, and Lambert from directly or indirectly, including (but not limited to) through any 

entity owned or controlled by him, participating in the issuance, purchase, offer, or sale of any 

security; provided, however, that such injunction shall not prevent him from purchasing or 

selling securities listed on a national securities exchange for his own personal account; 

VI. 

 Ordering each of the Relief Defendants to disgorge, on a joint and several basis with the 

individual Defendant who owns or controls that Relief Defendant, as appropriate, the ill-gotten 

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gains the Relief Defendant received and to pay prejudgment interest thereon pursuant to 

Exchange Act Sections 21(d) [15 U.S.C. §§ 78u(d)]; 

VII.  

Retaining jurisdiction over this action to implement and carry out the terms of all orders 

and decrees that may be entered;  

VIII. 

 Granting such other and further relief this Court may deem equitable and just. 

JURY DEMAND 
 
 The Commission demands a jury in this matter for all claims so triable. 
 
 
Dated: January 31, 2025   Respectfully submitted, 
 

      /s/ Derek S. Bentsen    
      Derek S. Bentsen 

Kenneth W. Donnelly (pro hac vice motion pending)  
 
SECURITIES AND EXCHANGE COMMISSION  

 100 F Street, N.E.  
 Washington, DC 20549  
 Phone: 202-551-6426 (Bentsen direct) 
 Email: [email protected]  

Phone: 202-551-4946 (Donnelly direct) 
 Email: [email protected] 
 
 Attorneys for the Plaintiff 
 
 

 
 
 

Case 1:25-cv-00549     Document 1     Filed 01/31/25     Page 49 of 49 PageID #: 49

mailto:[email protected]
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