Florida Man Pleads Guilty In Manhattan Federal Court To Defrauding Investors In Multiple Securities Fraud Schemes
Preet Bharara, the United States Attorney for the Southern District of New York, announced that STEVEN STALTARE pled guilty today to defrauding investors in connection with two fraudulent investment schemes. STALTARE’s first scheme involved defrauding investors in connection with the transfer of stock in Dematco, Inc. (“Dematco”). STALTARE’s second scheme involved defrauding investors in connection with soliciting investment in various stocks, including Dematco, Preventia, Inc. (“Preventia”), First Choice Healthcare Solutions, Inc. (“First Choice”), and Savtira Corporation (“Savtira”). STALTARE admitted misleading investors in connection with both schemes by making numerous false statements and misrepresentations and by misappropriating investment funds for his own personal use. STALTARE was arrested on August 8, 2013, and pled guilty today to a four-count Indictment before U.S. District Judge George B. Daniels.
STALTARE was previously convicted of securities fraud in United States v. Herbert Cannon et al., 04 Cr. 842 (GBD), in the Southern District of New York. STALTARE was sentenced to 32 months in prison by Judge Daniels in connection with his prior conviction.
Manhattan U.S. Attorney Preet Bharara stated: “Steven Staltare purported to offer investment opportunities, but was instead engaged in a shell game where he failed to pay for securities he purchased from one victim and offered them as collateral for a loan he secured from another victim whom he never repaid. He also took hundreds of thousands of dollars from other investors and never invested it as promised, instead using the money for himself. Now, having admitted his crimes, he stands to pay for them with his liberty.”
According to the allegations contained in the Indictment, the underlying criminal Complaint unsealed on August 7, 2013, and statements made during court proceedings:
First, from at least 2011 through 2012, STALTARE defrauded two investors (“Victim-1” and “Victim-2,” respectively) in connection with the transfer of shares of Dematco stock. In late 2011, STALTARE approached Victim-1 and asked Victim-1 to transfer hundreds of thousands of shares of Dematco stock that Victim-1 owned to a “partner” of STALTARE in exchange for $70,000 in cash. Victim-1 agreed to turn over his shares in Dematco in exchange for $70,000. At approximately the same time, STALTARE and another individual (“Partner-1”) approached Victim-2 and asked Victim-2 to loan them approximately $150,000 so that STALTARE could purchase shares of Dematco stock. STALTARE and Partner-1 promised Victim-2 that he would be paid $200,000 in three weeks and that Victim-2 would receive approximately 1/3 of the profits from the eventual sale of Dematco stock. Victim-2 was also promised that he would receive Dematco stock certificates as collateral for this loan. Based upon these representations, Victim-2 agreed to make this $150,000 loan to STALTARE and Partner-1. After Victim-2 made this loan, STALTARE provided Victim-2 with stock certificates that had been provided to STALTARE by Victim-1. Ultimately, STALTARE did not provide Victim-1 with the $70,000 that he had promised to pay in exchange for Victim-1’s shares of Dematco, nor did STALTARE provide Victim-2 with any repayment for the $150,000 loan or any profits from any sale of Dematco stock. In reality, STALTARE transferred Victim-1’s shares in Dematco to Victim-2 without compensating Victim-1, and misappropriated the funds provided by Victim-2 for STALTARE’s own personal benefit.
Second, from at least 2012 through 2013, STALTARE defrauded two other investors (“Victim-3” and “Victim-4,” respectively) by misappropriating funds intended for investment in the stock of various companies. STALTARE agreed to invest approximately $25,000 for Victim-3 in Preventia stock, promising significant investment returns. STALTARE also agreed to invest approximately $357,000 for Victim-4 in various securities, including stock in Dematco, Preventia, First Choice, and Savtira, again promising significant investment returns. However, once Victim-3 and Victim-4 provided STALTARE with the funds to invest in these stocks, rather than investing these funds in stocks on behalf of Victim-3 and Victim-4 as promised, STALTARE misappropriated these funds for his own personal benefit.
In the course of effectuating these fraudulent schemes, STALTARE defrauded victims in excess of $600,000 from 2011 through 2013.
STALTARE, 49, of Tampa, Florida, pled guilty to two counts of securities fraud and two counts of wire fraud. Each of the securities fraud and wire fraud charges carries a maximum term of 20 years in prison. The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by the judge. STALTARE is scheduled to be sentenced on March 12, 2015, at 10:00 a.m. by Judge Daniels.
Mr. Bharara praised the investigative work of the USPIS.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Brian Blais is in charge of the prosecution.