The New Jersey Bureau of Securities, represented by the Division of Law, has filed suit against Vincent Falci, 55, of Middletown, and various investment companies he operated, after he allegedly defrauded 182 investors through the sale of approximately $5.4 million in unregistered securities.
In addition to filing suit in State Superior Court in Freehold, the Bureau of Securities summarily revoked the exemptions Falci could rely on to operate in the state’s securities industry without registration.
Falci, a former fire chief with Monmouth County, told investors that he would primarily be investing their monies in tax lien certificates. However, according to the Bureau of Securities’ complaint, instead of primarily investing in tax lien certificates, Falci misused investor monies to, among other things, purchase five homes initially deeded to either himself or his wife, and for other undisclosed purposes. In its lawsuit, the Bureau is seeking full restitution to the defrauded investors, as well as the imposition of civil monetary penalties.
“Contrary to Falci’s representations to investors, Bureau of Securities’ investigators allege that not more than three percent of investors’ hard-earned monies were invested in tax lien certificates,” Acting Attorney General John J. Hoffman said. “We will not allow Falci’s brazen misrepresentations to go unchecked, nor will we allow his victims to go unprotected.”
The Bureau of Securities’ seven-count complaint alleges multiple violations of the Uniform Securities Law by Falci, including his being unregistered to conduct business when the alleged violations occurred between 2006 and 2009.
“In the course of the investigation, Falci admitted that the promotional materials he used to raise money from investors used only a hypothetical rate of return, though he didn’t disclose that to investors. It is important that investors be vigilant and on alert anytime a financial professional promises a high rate of return,” said Steve Lee, Acting Director of the New Jersey Division of Consumer Affairs.
“The Bureau of Securities’ investigation uncovered that, as part of Falci’s alleged fraud, he created and distributed false written annual updates to investors, purporting to show that their monies had been primarily invested in tax lien certificates as Falci promised,” said Bureau Chief Laura H. Posner. “This was not a case of a legitimate investment gone bad, but involved an alleged bad actor preying upon unsuspecting investors.”
Deputy Attorneys General Victoria A. Manning and Isabella T. Stempler of the Securities Fraud Prosecution Section in the Division of Law are representing the Bureau of Securities in this matter.
Rudolph G. Bassman, Chief of Enforcement, conducted the investigation on behalf of the Bureau.