Singas: Pair charged in $436G investor-fraud scheme

An disbarred investment broker and his business partner are accused of stealing $436,000 from four investors who believed they were buyers in a pre-initial public offering stock for high-profile companies, Nassau County District Attorney Madeline Singas said Tuesday.

Instead, Singas said, Peter Quartararo, 56, of Glen Cove, and his partner, Paul Casella, 54, of East Meadow, took those funds and spent the money on "personal luxury items and travel."

Both were arraigned Tuesday in Nassau District Court on multiple charges.

Quartararo faces five counts of second-degree grand larceny, one count of third-degree grand larceny, one count of fourth-degree conspiracy and one count of first-degree scheme to defraud. Casella was charged with two counts of second-degree grand larceny and one count of fourth-degree conspiracy. Each faces 5 to 15 years in prison if convicted on the top count, Singas said.

"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 in a statement Tuesday, adding, "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."

Official said the case had been referred to the Nassau County District Attorney's office earlier this year by the U.S. Securities and Exchange Commission.

Each victim provided between $72,000 and $200,000 for investment, Singas said, with the understanding the funds would be used to purchase the pre-IPOs.

Singas said that beginning in July 2019, Quartararo met with the victims and claimed to have access to a "pre-IPO" — a pre-initial public offering of stock — in Peloton, WeWork and Airbnb, at approximately $2 per share. When the companies eventually went public, Quartararo told investors, he would sell the shares and forward them the profits, less capital gains taxes, according to Singas.

An investigation determined the shares were never purchased, Singas said, and the funds were deposited into accounts controlled by Quartararo's father, Leonard Quartararo, and Casella. The money was then used, Singas said, to purchase food, travel and vehicles, including a 2020 Mercedes-Benz SUV and a down payment on a Maserati for Peter Quartararo.

Leonard Quatararo has not been charged in connection with the case.

The investigation also determined the SEC had no confirmed record of shares of IPO stock in the companies ever purchased by the defendants, Singas said.

Singas said Peter Quartararo had previously been barred from operating as a stockbroker in March 2013 by the Financial Industry Regulatory Authority. It was not immediately clear Tuesday what led to the decision.

"If you believe you were the victim of an investment fraud perpetrated by Peter Quartararo, Paul Casella, or Leonard Quartararo," the statement said, " contact the Nassau County DA’s Office Financial Crimes Bureau at 516-571-2149."

By John Valenti

john.valenti@newsday.com

John Valenti, a reporter at Newsday since 1981, has been honored nationally by the Associated Press and Society of the Silurians for investigative, enterprise and breaking news reporting, as well as column writing, and is the author of “Swee'pea,” a book about former New York playground basketball star Lloyd Daniels. Valenti is featured in the Emmy Award-winning ESPN 30-for-30 film “Big Shot.”