Litigation Release No. 25038 / February 26, 2021
On February 24, 2021, the U.S. District Court for the Eastern District of New York entered a final consent judgment against Christopher Fulco and Fulco’s company JM Capital Holdings LLC. The Securities and Exchange Commission had charged Fulco and JM Capital with engaging in an offering fraud.
According to the SEC’s complaint, filed September 18, 2019, Fulco, through JM Capital, cold-called investors, including many elderly retirees, and solicited investments in multiple private companies. As alleged, the defendants never invested the money in the manner represented. Instead, according to the complaint, Fulco used the money to gamble at casinos, take vacations, and purchase luxury goods, among other personal uses. The complaint also alleged that Fulco used a series of aliases to conceal his true identity from investors and created fictitious documents to induce investors to transfer money to JM Capital.
In a parallel criminal action based on the same conduct, the U.S. Attorney’s Office for the District of Montana filed criminal charges against Fulco. Fulco pleaded guilty to one count of mail fraud, one count of money laundering, and one count of securities fraud. He was sentenced to 36 months in prison and ordered to pay $1,643,074 in restitution.
The final judgment enjoins Fulco and JM Capital from violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and the securities registration provisions of Sections 5(a) and 5(c) of the Securities Act, and finds them liable, on a joint and several basis, for disgorgement of $1,604,574, which is deemed satisfied by the restitution ordered against Fulco in the parallel criminal action. The SEC also dismissed its action against a relief defendant.
The SEC’s litigation was conducted by James M. Carlson and Jessica Neiterman and supervised by Stephan Schlegelmilch. The SEC’s investigation was conducted by Ms. Neiterman and supervised by Corey Schuster of the SEC’s Asset Management Unit.