Garfield man charged with bilking investors of .7M | State | -- Your State. Your News.

May 22nd
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Garfield man charged with bilking investors of $1.7M

mousetrap_optHundreds of unlucky investors have allegedly lost $1.7 million to a Bergen County man who promised they would profit from his startup horseshoe manufacturing company.

They were even told a Dubai prince was among the confident investors.

Instead, Samuel M. Serritella, 64, of Garfield was accused Tuesday of selling unregistered shares of stock in his horseshoe company, an action that led to charges of securities fraud, theft by deception, misapplication of entrusted property, money laundering and misconduct by a corporate official.

Serritella allegedly stole more than $350,000 in investor funds to pay for personal expenses. Although he also spent funds in an effort to launch the company, the venture failed.

According to state Criminal Justice Director Deborah L. Gramiccioni, the state filed a criminal complaint before state Superior Court in Hackensack.

Serritella was president, chief financial officer and chairman of International Surfacing Inc., which was based at 5 Erie Street in Garfield. It is charged that between February 2004 and May 2006, Serritella fraudulently obtained in excess of $1.7 million from more than 300 investors, most of whom were New Jersey residents, by selling them shares of International Surfacing. The shares were not registered with the Bureau of Securities as required by law, and Serritella was not registered as an agent authorized to sell securities in New Jersey.

Serritella held investment conferences where he told investors they could get in on the ground floor by purchasing shares in a company he planned to take public. He allegedly told at least one group of investors during a hotel meeting that the venture's clients included a prince in Dubai.

Serritella allegedly deposited the investors' funds into several bank accounts that he controlled. He allegedly misappropriated funds totaling approximately $354,720 for personal expenses. He also allegedly wrote checks to himself, made cash withdrawals at ATMs, paid credit card bills, and made debit card purchases using investor funds in the accounts. He used the funds to pay for such personal expenses as airline and hotel bills, tavern bills, and medical costs. He also allegedly used investor funds to make personal loans to three friends totaling $84,000.

Serittella used some funds for startup costs for the company, such as rent for a building, salaries, and payments to a company contracted to assist in manufacturing horseshoes.

"This defendant sold $1.7 million in fraudulent and unregistered securities to trusting investors," said Attorney General Anne Milgram. "He repaid their trust by stealing hundreds of thousands of dollars of their money and leaving them with worthless shares in a failed company."

"The Division of Criminal Justice is focusing on more complex white collar crime cases, including securities fraud cases such as this one," said Gramiccioni. "In prosecuting this case, we are working closely with the Bureau of Securities, which thoroughly investigated the alleged fraud and thefts committed by Serritella."

The charges resulted from an investigation by the state Bureau of Securities. Tuesday, Bureau of Securities Chief Marc B. Minor issued an order assessing a penalty of $20,000 against Serritella for violation of the state Uniform Securities Law. Minor found that Serritella committed securities fraud and sold unregistered securities as an unregistered agent.

The bureau's investigation was conducted by Acting Chief of Investigations Rudolph Bassman and Deputy Attorney General Victoria Manning. Deputy Attorney General Francine S. Ehrenberg and state Investigator Michael Fallon are handling the case for the Division of Criminal Justice Major Crimes Bureau.

Serritella has been ordered to appear before Judge Harry G. Carroll in Hackensack on July 29.

Serritella faces up to 10 years in prison and a fine of up to $650,000.



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