Glen Cove man charged in alleged $436,000 fraud scheme

A barred investment broker from Glen Cove and his business partner were arraigned Tuesday on charges alleging that they stole $436,000 from four investors who believed they were investing in pre-initial public offering stock for several high-profile companies, according to Nassau County District Attorney Madeline Singas. The defendants allegedly spent those funds on personal luxury items and travel.

Peter Quartararo, 56, of Glen Cove, is charged with five counts of second-degree grand larceny (a C felony), one count of third-degree grand larceny, one count of fourth-degree conspiracy (an E felony), and one count of scheme to defraud in the first degree (an E felony). If convicted on the top count, the maximum
sentence is five to 15 years in prison.

Paul Casella, 54, of East Meadow, is charged with two counts of second-degree grand larceny and one count of fourth-degree conspiracy. If convicted on the top count, the maximum sentence is five to 15 years in prison.

The defendants were arraigned before Judge Karen Moroney. The case was referred to NCDA by the United States Securities and Exchange Commission earlier this year.

"These defendants allegedly conned investors to give them hundreds of thousands of dollars promising high returns from prominent companies, but instead they pocketed the funds to support their lavish lifestyles,” Singas said. "Investment frauds cost innocent Americans billions of dollars each year and I encourage every investor to verify the credentials and licenses of any financial professional they work with and to report any suspicious activity to my office."

According to Singas, beginning in July 2019, Quartararo met with four victims and told them that he had access to "pre-IPO" or pre-initial public offering stock in the companies Peloton, WeWork, and/or Airbnb for approximately $2 a share. Quartararo told them that when the companies later went public, he would sell the shares and give the profits to the victims, less capital gains taxes.

Each victim gave Quartararo between $72,000 and $200,000 in checks with the understanding that the funds would be used to purchase the pre-IPO shares, Singas said. The investigation revealed that the defendants never purchased any shares of stock in the pre-IPO companies represented on the victims' behalf and instead, Singas said, the victims' checks were deposited into accounts controlled by Leonard Quartararo, Peter Quartararo's father, and Casella, Peter Quartararo's business partner. These funds were then allegedly used by the defendants to purchase food, travel, and vehicles, including a 2020 Mercedes Benz SUV and as the down payment on Peter Quartararo's Maserati automobile. Several large cash withdrawals were also made by Leonard Quartararo, according to Singas.

The SEC has confirmed that no shares of IPO stock in Peloton, WeWork, and Airbnb were ever purchased by the defendants.

Peter Quartararo was previously barred from operating as a stock broker in March 2013 by the Financial Industry Regulatory Authority (FinRA).

Five court-ordered search warrants have been executed in connection with this investigation.

“My client maintains his innocence,” Joseph Murray, Esq., Casella’s attorney, said. “We look forward to litigating this case.”

Quartararo's attorney could not be reached for comment by press time.