Steven Pagartanis Charged for Defrauding Customers
On May 30, 2018, the Securities and Exchange Commission (“SEC”) charged a former Long Island registered representative with defrauding long-standing brokerage customers in an $8 million investment scam. According to the SEC, Steven Pagartanis, who was an associate with a broker-dealer in Long Island, NY, defrauded investor and retiree customers, that he would invest their funds in either a public or private land development company. The SEC’s complaint, charges Pagartanis with violating the anti-fraud provisions of the federal securities laws.
The SEC alleges, Steven Pagartanis, who was an associate with a registered broker-dealer in Long Island, NY, he falsely told investor and retiree customers that he would invest their funds in either a public or private land development company. He assured that the funds would be safe and promised guaranteed monthly interest payments on the investments. Pagartanis’s directed his customers to write checks payable to an entity that Pagartanis secretly controlled. As a result, the customers invested approximately $8 million to Pagaratanis. Pagartanis used the funds to pay personal expenses and make the promised “interest” payments to his customers. To defraud customers, Pagartanis created fake account statements reflecting ownership interests in the land development companies. The scheme became public earlier this year when Pagartanis quit making the phony interest payments to customers.
“As part of the alleged scam, Pagartanis preyed on his customers’ trust, duping them to write checks payable to his own entity. Regardless of how long investors have worked with their brokers, they should always confirm that recommended investments are approved for sale by their brokerage firm before transferring funds.” said Marc P. Berger, Director of the SEC’s New York Regional Office.
The SEC’s complaint, charges Pagartanis with violating the anti-fraud provisions of the federal securities laws. The SEC is ordering Pagartanis to return his allegedly misappropriate gains plus prejudgment interest, and to pay financial penalties. In similar action, the Suffolk County District Attorney’s Office filed criminal charges against Pagartanis.
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