Connecticut Man Sentenced To Prison For Role In $5 Million Investment Fraud Scheme
NEWARK, N.J. - A Fairfield, Connecticut, man was sentenced today to 19 months in prison for his role in a securities scheme that defrauded investors out of more than $5 million, U.S. Attorney Carpenito said.
James Trolice, 64, previously pleaded guilty before U.S. District Judge William J. Martini to a two-count information charging him with securities fraud and transacting in criminal proceeds. Judge Martini imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Trolice was the president and owner of Trolice Consulting Services LLC and the president and chief marketing officer of eAgency, a California-based company that developed mobile security products. Trolice and Lee Vaccaro, 46, of Las Vegas, sold investors interests in Trolice Consulting Services and companies Vaccaro controlled and falsely represented to investors that those companies held warrants in eAgency. Warrants are derivative securities that give the holder the right to purchase common stock at a specific price within a certain time frame.
Trolice admitted that he made oral and written misrepresentations concerning the existence, number, validity, and term of eAgency warrants purportedly owned by the investment companies; the amount of money he had personally invested in and raised for eAgency; and his current position at eAgency.
Trolice also admitted that beginning in January 2011, the dollar amount of interests Trolice and Vaccaro sold in the investment companies began to surpass the dollar amount of valid warrants held by the investment companies. Neither Trolice nor Vaccaro disclosed to investors the risk that their investments would be diluted by the sale of additional interests in the companies. Altogether, Trolice and Vaccaro defrauded investors out of more than $5 million.
In addition to the prison term, Judge Martini sentenced Trolice to three years of supervised release and ordered him to pay $5,000,512.65 representing the proceeds of his offense.
Vaccaro previously pleaded guilty to his role in the scheme and was sentenced Feb. 17, 2017 to 78 months in prison.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, and special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Bryant Jackson in Newark, with the investigation. He also thanked the U.S. Securities and Exchange Commission’s New York Regional Office, under the direction of Regional Director Marc P. Berger and Senior Associate Regional Director Sanjay Wadhwa, for its assistance.
The government is represented by Senior Litigation Counsel Daniel Shapiro of the U.S. Attorney’s Office Economic Crimes Unit and Executive Assistant U.S. Attorney Zach Intrater.
Defense counsel: Michael Koribanics Esq., Clifton, New Jersey