New York City-based Broker Permanently Barred by FINRA; Allegation of VGTel Sale

Rafael Santiago (CRD# 2494647) of New York, New York firm Primary Capital, LLC (CRD# 127921) is under investigation after being barred from the securities industry in April 2016.

Santiago, according to his Financial Industry Regulatory Authority (“FINRA”) BrokerCheck report was barred by FINRA after he failed to respond to FINRA’s request for information.  Besides that misconduct disclosure on his FINRA BrokerCheck report, he has two other misconduct disclosures.

Santiago has a FINRA arbitration complaint pending where the claimant alleges $495,000 in losses.  The complaint, filed in September 2015, according to the BrokerCheck report involve the notorious VGTel stock and Santiago’s involvement with VGTel promotion.

Santiago’s other misconduct disclosure occurred in October 2014 when COR Clearing LLC discharged him after allegations that he entered unauthorized trades in a customer’s account.

Santiago has bounced around firms since the beginning of his career in the securities industry in 1994.  Among the six firms he has bounced around in his career, FINRA has expelled two from the securities industry, including John Thomas Financial and Halcyon Cabot Partners, LTD.

VGTel is the brainchild of investment fraud orchestrator Edward Durante.  According to an SEC complaint, VGTel is a shell company owned by Durante used to defraud investors. Durante, according to the complaint, defrauded at least 50 investors out of at least $11 million through the sale of securities in VGTel.

According to the complaint, Durante sold approximately six millions shares of VGTel stock to investors using various fictitious names to hide his criminal past, including “Edward Wise,” “Ted Wise,” “Efran Eisenberg,” and “Anthony Walsh.”  He solicited and enlisted the aid of Larry Werbel (CRD# 828351) and his adviser firm Evolution Partners Wealth Management, LLC (“Evolution Partners”), Sheik Khan (CRD# 2448117), Christopher Cervino (CRD# 2778817), Walter Reissman, and Kenneth Wise to help perpetrate the scheme, according to the complaint.

According to the complaint, Durante had started planning the scheme while he was in prison. Upon leaving the prison and using one of his fictitious names, he acquired VGTel as a shell company, and assigned the shares to various entities to conceal his whole-ownership of VGTel.  Durante, according to the complaint, was unable to attract investors due to his criminal history and notified the recently-hired Reissman that he would use a fictitious name to avoid investor concerns about his criminal history.

According to the complaint, over the course of the scheme, Durante either hired or bribed the above-named accomplices in order to further the scheme.  According to the complaint, Wise would pay Werbel and Cervino, both of which having done no due diligence on VGTel, to convince investors to invest in the worthless company.  Durante himself bribed Khan to direct investors to invest in the company, the complaint said.

Various brokers and their potential sins are slowly rising to the surface of this scheme’s dirty waters.  More, Like Santiago and the others mentioned above are surely to rise.

Contact Our Firm if You’ve Lost Money

If you have purchased shares of VGTel or any other securities or investment products from any brokers, including fictitious names, in this article, you may be eligible to recover some or all of your lost investment.  Additionally, some of the firms of these brokers may be accountable for the damages for failure to supervise these brokers.

Silver Law Group represents the interests of investors who have been the victims of investment fraud.  If you have questions about your legal rights, please contact Scott Silver of the Silver Law Group for a free consultation at ssilver@silverlaw.com or toll free at (800) 975-4345.