In an economy that is struggling, it is easy to feed on the fears of people looking for ways to try to protect themselves financially, and that’s exactly what John Mattera, 50, of Fort Lauderdale, Florida did. He fed on the fear and desperation of people wanting to secure their futures and ripped them off.
In a scam that reaches over 11 million dollars, Mattera sold non-existent shares to people in the form of supposed special purpose vehicles that were set up to hold stock in companies like Facebook and Groupon that were expected to make public offerings, only there were no shares.
Mattera was the owner of a company named Praetorian Global Fund Ltd. Most of the money he lured from these unsuspecting people he routed to himself instead to live the grand life of fast cars, expensive home furnishings and jewelry. He has also been reported to have used the money to pay his own personal taxes and settle another civil suit he had.
He was not alone in this endeavor. Praetorian’s managing director, Bradford van Siclen, was identified by a complaint filed by the U.S. Securities and Exchange Commission, and has pleaded guilty to all charges and is cooperating with investigators.
Mattera has been charged with one count of wire fraud, one count of conspiracy, one count of securities fraud and one count of money laundering. He is facing up to five years imprisonment for the conspiracy charge and up to 20 years each on the other three.
According to the SEC, in 2003, Mattera plead guilty to seven counts of grand theft in three different criminal cases, all in Florida. Praetorian claimed to hold shares in companies other than Facebook and Groupon. Fisker Automotive and Bloom Energy Corp are two other major companies. None of the companies are being charged with any criminal wrong doing.
The SEC is seeking to freeze all funds of Mattera, Van Siclen and Praetorian in the suit that they have filed. In September of this year, a civil suit was filed by a group of investors who thought they were investing in shares of Fisker Automotive, stated that they were defrauded by Mattera, van Siclen and others. No word of who the others are has been released, nor has it been mentioned that there are any others involved in this case as well.
According to court records, investors that Mattera lied to sent in upwards of 11 million dollars to be held in escrow accounts in a Florida bank. He has been accused of falsely telling these investors that their money would be safe until the IPO (initial public offering) was complete. Instead of keeping their money safe, Mattera transferred the majority of the money into accounts he held with his associate and spent large amounts of the money on his own lifestyle.
It has not been mentioned whether there is any of the investors’ money left, or if they will be able to recoup any of their loss. It could very well be a hard, awful lesson to learn about checking the references and backgrounds of investment firms, and then checking again. It’s people like Mattera that make it hard for the legitimate companies that truly do honest business.
- SEC Sues Mattera, Others In Alleged Investment Scam (forbes.com)
- Florida Man Charged in NY Investment-Fraud Case (abcnews.go.com)
- Man arrested in alleged Facebook stock fraud (marketwatch.com)