New York Securities Boiler Room Scheme Targeting Seniors

The SEC has brought additional charges against a Long-Island, New York-based boiler room that was sued for defrauding elderly and unsophisticated investors. The latest charges allege that Christian Romandetti, CEO of First Choice Healthcare Solutions Inc., the boiler room, and four others have committed fraud within the company’s shares and have generated more than $3.3 million of illegal profits. The new charges also allege that the parties generated more than $560,000 in kickbacks for Romandetti.

The SEC’S statement alleges that Romandetti and the other parties lied to more than 100 victims in a scheme that inflated First Choice’s stock price from less than $1 per share to $3.40 per share. From September 2013 until June 2016, the parties used several accounts to disguise their trading, and engaged in fraudulent trading practices. Elite Stock Research, a boiler room run by one of the defendants, Anthony Vassallo, was hired to promote First Choice to investors.

The SEC originally charged Elite Stock Research with bilking victims out of more than $10 million through fraudulent sales tactics and lies about penny stocks. Seven of the 13 individuals have pleaded guilty to criminal charges brought by the U.S. Attorney’s Office for the Eastern District of New York. The litigation against the 13 individuals is still continuing.

The most recent action from the SEC charges Romandetti, Vassallo, Mark Burnett, Jeffrey Miller, Frank Sarro and Elite Stock Research with fraud and everyone except for Miller with market manipulation. The SEC wants the return of ill-gotten gains with interest, civil penalties, and penny stock bars, and permanent injunctions. It is also seeking office-and-director bars against Romandetti and Burnett.

The SEC is encouraging investors to check the backgrounds of people who are selling them investments by using the website Investor.gov. The website will tell whether or not the investors are in fact registered professionals.

Boiler room cold callers lie to investors to convince them to invest in stocks which are frequently the target of pump-and-dump schemes highlighted in movies like Boiler Room and Wolf of Wall Street. Investors should feel free to hang up on any cold caller. If you or someone you know falls victim to a cold calling stockbroker, call our office for advice.

Silver Law Group is a nationally-recognized securities law firm headquartered in South Florida representing investors worldwide with their claims for losses due to securities and investment fraud. The firm has successfully recovered multi-million dollar awards for its clients through securities arbitration and the courts. To contact Scott L. Silver to discuss your legal matter, call toll-free (800) 975-4345 or e-mail him at SSilver@silverlaw.com.