On Tuesday, federal prosecutors in Cleveland filed charges against former broker Jerry Cicolani for his participation in a Ponzi scheme. Cicolani was a licensed stockbroker with PrimeSolutions Securities, Inc., a Cleveland-based brokerage firm, up until May 2014.
He has been charged with the sale of unregistered securities and structuring. The securities fraud attorneys at Meyer Wilson have been blogging about this Ponzi scheme since 2014. Attorney David Meyer has personally handled dozens of investment fraud cases against former broker Jerry Cicolani when we was with his prior brokerage firm, Merrill Lynch.
You can get more background on the KGTA case here:
According to court filings, Cicolani recruited investors to invest in KGTA Petroleum, which was operated by Ken Grant and others. Cicolani received approximately $5 million in commission fees for enlisting 39 investors, who collectively lost $7 million from their investments with KGTA, according to the information.
The company was marketed to investors as a petroleum company that earned profits by buying and reselling various crude oils and refined fuel products. According to the SEC, KGTA did not generate any revenue through the purchase and resale of oil products. Investor funds were not held in escrow, and KGTA used funds from new investors to pay fake returns to old investors. KGTA, in reality, is nothing more than a Ponzi scheme.
Grant was criminally charged a few months ago and plead guilty. He is awaiting sentencing on May 20 th. We reported on Grant’s criminal charges in an earlier blog post.