Legal Briefs
Kris Roglieri Arrested for Wire Fraud, in Jail
June 1, 2024Update: Roglieri to stay in prison indefinitely while awaiting trial after shocking revelations.
Kris Roglieri has been arrested by the FBI for wire fraud. He is currently in jail pending a June 3 hearing. The sealed criminal complaint was unsealed on Friday May 31 after months of news headlines and civil court proceedings revealed that his commercial lending business may have actually been operating as a fraudulent ponzi scheme. More than $100 million of customer funds are alleged to have gone missing. Roglieri himself is in personal Chapter 7 bankruptcy.
The criminal complaint focuses on just one alleged crime, however, wire fraud for how Roglieri dealt with a client named 1800 Park Avenue LLC. As part of that, Roglieri committed to fund a $98.9M line of credit to 1800 Park in exchange for a $5M upfront interest payment that would purportedly be held in trust. Roglieri is then alleged to have misappropriated all the funds for his own personal use.
Among all the former clients of Roglieri claiming they were victims of fraud, 1800 Park was one of the last to enter the picture. 1800 Park didn’t file its civil suit until April 3, months after several others, where it not only named Roglieri and his companies Prime Commercial Lending, LLC and Prime Capital Ventures, LLC as co-defendants but also three of Roglieri’s employees. Roglieri was the only person named in the criminal complaint, however.
Although Roglieri had represented in his Chapter 11 bankruptcy (now converted to Chapter 7) that his businesses had stopped operating, one of those businesses (NACLB) has publicly represented that it had merely rebranded to a new name, and it is still soliciting payments from potential customers under that name.
Almost Sold Out – The Industry’s Legal Conference in NYC (AFBA) – Features Big Name Speakers
May 29, 2024
This is the last chance for attorneys and executives interested in the most comprehensive industry legal education to register for the Alternative Finance Bar Association Conference taking place in NYC. While the day of June 3rd is for attorneys only, the evening of June 3rd and the full day of June 4th are open to business people!
The outstanding lineup of speakers includes Andrew Smith, a partner at Covington & Burling LLP, who was formerly the Director of the Bureau of Consumer Protection at the FTC, and Bob Zadek, Of Counsel for Buchalter.
A June 4th panel moderated by deBanked‘s Sean Murray will feature speakers Heather Francis at Elevate Funding, Mary Donohue at Revenue Based Finance Coalition, John Viskocil at Fora Financial, and Marshall Goldberg at Glass & Goldberg. Tickets are almost sold out.
For questions, email Lindsey@lrohanlaw.com or fitzgeraldmegan19@gmail.com
Agenda below:
Kris Roglieri Bankruptcy Converted to Chapter 7, The End of NACLB?
May 15, 2024
A judge approved a motion to convert the Chapter 11 bankruptcy proceeding for the embattled Kris Roglieri to a Chapter 7. The intent behind this is to kickstart the process to sell off Roglieri’s assets for the benefit of creditors whereas before Roglieri hoped that his various wholly owned businesses could somehow continue. The trustee, however, said that such an outcome was impossible given that Roglieri did not maintain financial records, has no revenue coming in, is being investigated by the FBI for ~$100 million in allegedly missing customer funds, and has no path forward. The creditors at issue in the matter felt similarly.
Among Roglieri’s wholly owned assets are Commercial Capital Training Group and the National Alliance of Commercial Loan Brokers (NACLB conference), according to documents he previously submitted to the court. He owns 100% of the membership interest in each LLC. During a prior hearing, the Chapter 11 trustee asked Roglieri if he understood that he could not transfer NACLB’s assets without trustee approval after rumors swirled that he was trying to sell it. At the time, Roglieri said that there had been no serious talks in that regard. It may have been a hard sell and could still continue to be. Despite the NACLB conference’s longevity, for example, Roglieri asserted during the proceedings that he did not maintain formal financial records for it and there are no balance sheets, P&Ls, or statement of cash flows related to it. It also apparently stiffed the venue of its last event since it lists an unpaid debt of $436,237 to Caesars Entertainment in Las Vegas.
The NACLB conference has also apparently changed its name in order to distance itself from its connection with Roglieri, according to emails reviewed by deBanked. On March 25, an official NACLB mass email communication asserted that the conference would go forward “despite uncertainties surrounding this year’s event due to unrelated legal issues” and that “we are thrilled to announce that the annual conference will proceed this November under a new rebranded name, maintaining the trusted team that has organized the event for the past 9 years.”
Following that, an official NACLB conference representative sent out emails affirming that it was rebranding to the “Commercial Loan Broker Association” and that the conference would actually take place in a new location with a different date.
The Receiver managing Prime Capital Ventures, LLC, the main entity at the heart of the Roglieri saga, filed Chapter 11 bankruptcy protection for it on Tuesday. As part of that, he stated that the entity owes more than $100 million to its creditors.
Funding Merchants in New York? What Don’t You Know?
May 15, 2024It doesn’t matter if you’re sitting in an office located in Florida, California, New Jersey, or anywhere else, if you work with any merchants in New York State the legal stakes have never been higher. If you saw even half the commentary and feedback that deBanked has reviewed over the last two months about what’s taking place, you’d understand why you really can’t afford to miss this segment at Broker Fair this coming Monday in NYC. You’re not the only one with questions.
Don’t be that person that reaches out after it’s too late to say you wish you had known something ahead of time. Hear it from qualified attorneys that are both on the panel and in attendance at the event on May 20th in NYC. Already have a lawyer that advises you on all this? Great! Send them to this too. You only get one shot to do it right in this business. Register Here
An MCA Debt Settlement Owner Arrested by FBI
May 8, 2024
One of the alleged masterminds behind MCA Cure LLC, LDMS Group, LLC, and Evergreen Settlement Group LLC, was arrested by the FBI six weeks ago after inducing merchants to divert payments away from their MCA providers and then failing to negotiate with the funders.
The accused is Mark Csantaveri, who is named along with two unnamed co-conspirators from New Jersey. Both co-conspirator names were made easily discoverable by details disclosed by the FBI however. The debt settlement websites made claims that they had a “proven proprietary debt restructuring system” that could lower their payments by 80%. As part of the enrollment process, merchants were directed to send funds to an escrow account, for which the co-conspirators would then transfer to their own personal accounts.
According to the complaint, they would then claim to be negotiating with the funders and give updates about waiting to hear from attorneys and settlements. The charges are for Wire Fraud, Conspiracy to Commit Wire Fraud, and Money Laundering.
Csantaveri was immediately remanded to jail, was represented by a public defender and was only recently released on a $200,000 unsecured bond.
“Csantaveri and his conspirators misappropriated the victims’ money for their personal use, including over $1 million in gambling expenses,” the DOJ said. “Csantaveri’s scheme ultimately defrauded more than 50 victims of more than $3.4 million dollars.”
Conspiracy to commit wire fraud is punishable by a maximum of 20 years in prison and a fine of $250,000 or twice the gross gain or loss involved in the offense, whichever is greatest.
“MCA Debt Settlement” Company Sued
May 7, 2024A firm that offers to “restructure corporate debt primarily MCA or Merchant Cash Advance debt” was sued last month by a small business owner for fraudulent inducement, consumer fraud, unjust enrichment, breach of fiduciary duties, and for a declaratory judgment. Corporate defendants include MCA Resolve LLC and Coastal Debt Resolve (ABSM LLC) in addition to several individuals.
The alleged scheme, as laid out by plaintiff, asks business owners to pay huge fees to the debt settlement firm all while being forced to default on their business financing agreements on the hope that they might eventually get a proposal to settle for far less than the amount agreed. In this case, plaintiff explained that the result was that they actually ended up owing more because of how much defendants were charging. The case was filed in the Superior Court of Arizona and can be viewed here.
Notably, MCA Resolve LLC is currently being sued by two unrelated MCA funding companies in the New York Supreme Court.
Missing Funds in Prime Capital Ventures Case Now Exceed $90 Million
February 20, 2024
The case of the missing $50 million in the Prime Capital Ventures deposit scheme case is quickly ballooning to a much larger sum. On Tuesday, the Receiver representing Prime in the recovery efforts informed the Court that the total owed to victims is now almost $91 million and that it has yet to locate and secure anywhere near that amount. The growing number is attributed to the fact that more victim companies are beginning to come forward after news of the receivership and personal bankruptcy of Prime’s principal Kris Roglieri have been made public.
Roglieri’s attorney has asked the Court for the automatic stay of actions afforded to him in his personal bankruptcy be also applied to the other businesses he owns that the Receiver of Prime is suing, including the National Alliance of Commercial Loan Brokers entity. Roglieri is reportedly the 100% owner of the NACLB.
The party that sued Prime into receivership in the first place, a company named Compass-Charlotte 1031, LLC, said in its rebuttal to Roglieri’s request that not only is Prime indisputably insolvent but that there is no evidence that Roglieri’s other businesses at issue are not equally insolvent. Compass-Charlotte and the Receiver have both asked the Court not to extend the bankruptcy stay to these other businesses so that Prime can continue to pursue the assets.
NACLB Named in Receivership Pursuit
February 13, 2024
A series of legal disputes between creditors and Prime Capital Ventures, LLC has taken an interesting turn. Originally, creditors forced Prime Capital Ventures, LLC, a commercial real estate financing firm, into involuntary bankruptcy late last year but withdrew it after a review determined that the assets they sought were allegedly no longer in the possession of the defendant. Despite this, related lingering issues kept the entity in receivership and on Jan 24 the Court appointed a permanent receiver. The Receiver, on behalf of Prime, then filed a lawsuit against its owner Kris D. Roglieri and his related entities including Prime Commercial Lending, LLC, Commercial Capital Training Group, The Finance Marketing Group, FUPME, LLC, and the National Alliance of Commercial Loan Brokers LLC and other individuals for the recovery of assets related to Prime.
The Receiver opens the lawsuit by saying that “This case involves what appears to be a multi-state fraud scheme with victims holding claims for well over $50 million for return of deposits, which were paid and then not returned.”
On February 2, FBI agents executed search warrants at the homes of Roglieri and Kimberly Humphrey, according to a letter filed by a lawyer for Prime which was reviewed by deBanked. They are in the process of getting separate criminal defense counsel, according to that letter.
The lawsuit by the Receiver against Roglieri et al can be viewed here.
