Finding that Montclair resident Nicholas Lattanzio, his Upper Montclair-based “Black Diamond” investment management companies, and Connecticut resident Pasquale Montesanti orchestrated an investment fraud of at least $4 million – and misused investor funds to, among other things, purchase a more than $1 million home, more than $100,000 worth of merchandise from Tiffany & Co., a golf club membership, and to pay off hundreds of thousands in credit card debt – the New Jersey Bureau of Securities today ordered the respondents to pay a civil penalty of $2.5 million.
In parallel proceedings, today the FBI arrested Lattanzio and he was charged by complaint with three counts of wire fraud and two counts of securities fraud by the U.S. Attorney’s Office for the District of New Jersey. In addition, the Securities and Exchange Commission filed a civil complaint in the United States District Court for the District of New Jersey against Lattanzio and the Black Diamond investment management companies.
Montesanti has not been charged with a crime.
Bureau of Securities Chief Laura H. Posner said, “Lattanzio, Montesanti and the Black Diamond Entities lured investors into believing that they could provide access to multiple million dollar credit lines and that investing in Black Diamond was a safe investment that generated significant 18% annual returns. Instead of using investor funds as promised, Lattanzio used the money as if it was his own.”
In addition to the $2.5 million civil monetary penalty, the Penalty Order prevents the respondents from offering investment advice or selling securities unless registered with the Bureau.
The Bureau of Securities can be contacted toll-free within New Jersey at 866-I-INVEST (866-446-8378) or from outside New Jersey at 973-504-3600. The public is encouraged to visit the Bureau’s website at www.NJSecurities.gov.