The SEC has charged Nicholas Lattanzio, a New Jersey man who was allegedly posing as a hedge fund manager, with fraud. According to the SEC, Lattanzio promised a number of small businesses substantial returns if they invested in Black Diamond Capital Appreciation Fund, a hedge fund that Lattanzio said he controlled. According to the SEC’s charges, Lattanzio bilked investors out of $4 million.
The SEC alleges that Lattanzio promised investors that they could withdraw their money if the investment didn’t work out. He also allegedly claimed, falsely, that Black Diamond possessed $800 million in assets under management and regularly generated double-digit returns. In reality, according to the SEC’s complaint, Black Diamond never had more than $5 million.
Lattanzio allegedly used most of the money generated by the scheme on himself and his family, purchasing things like a million-dollar home, a luxury car, and jewelry.
Small businesses have a legitimate need for financing, and Lattanzio allegedly took advantage of this. According to the Director of the SEC’s New York Office, Lattanzio “falsely reassured his investors they were earning profits while he was swiping their money to bankroll his affluent lifestyle that he otherwise could not afford.”
In addition to the SEC’s fraud charges, the U.S. Attorney for the District of New Jersey announced criminal actions against Lattanzio.