Editor’s note: We misstated a fact about Matthew Harrington’s involvement in the Meli case. We corrected our story and apologize for the error.
After weeks of getting hammered by the U.S. Attorney’s office, accused ticket fraudster and Ponzi schemer Joe Meli and his legal team have developed an interesting tactic — demand prosecutors give up the names of the investors he allegedly defrauded and the names of entertainment executives he made deals with.
That list — which could potentially include 180 individuals, organizations and celebrities — could be hugely embarrassing for the victims, who the government said were defrauded of $95 million. Many of the victims are hedge funds and investment banks and the revelation that they gave investor money to Meli would be humiliating. And because Meli has become such a toxic liability in the ticketing space, there are many music executives who secretly tell Amplify they have met the alleged con man before, but few that want that information printed and none who want to be named in public court documents that anyone could access.
In response, prosecutors with the famed Southern District of New York are fighting the request and putting the squeeze on Meli. After freezing the $685,000 he advanced to his attorneys as a retainer, lawyers for the DOJ are drowning Meli’s legal team in evidence, introducing over 1 million new pages of documents in the fraud trial against Meli. Prosecutors are also fighting a request by Meli’s defense for more time to deal with the mountains of evidence, asking to push the start of the trial from November to January.
A judge granted the request, but not before acting U.S. Attorney Joon Kim warned in a letter that “certain bank records for third parties and e-mails belonging to third parties” were being looked at by attorneys.
Since his arrest in January for allegedly bilking $95 million from 130 investors, the U.S. Attorney’s office has placed enormous pressure on Meli. His business partner Steve Simmons was arrested while Matthew Harriton was sued by the Securities and Exchange Commission. Radio personality Craig Carton was also arrested after he allegedly embarrassed the Barclays Center by tricking someone at the arena into helping him steal $2 million via wire transfer. Meli’s case has also meant the downfall of two hedge fund managers, Steve Simmons, who was arrested and charged with fraud, and Mark Varacchi, an alleged co-conspirator. Both men worked for Sentinel Growth Fund Management which stands accused of delivering victims to Meli.
What happens next? Does Meli bow to the immense pressure and cooperate with the government? Are there more co-conspirators who knowingly helped Meli or have the major players mostly been arrested? And if the case does goes to trial, how many embarrassing secrets and deals lie within the million pages of evidence being reviewed by both sides?
The case has done significant damage to DTI, who find themselves embarrassingly entangled in the Meli mess and face lawsuits from victims seeking repayment. Meli was on the board of DTI and at one time transferred CEO Curtis Cheng a good-faith payment of $250,000 to buy the company for $63 million. Investor Michael Connor and his group TGT, allege that DTI and Cheng are liable for Meli’s crimes and are seeking reimbursement and $10 million in punitive damages. Another group named CVC ended up buying into DTI, but it doesn’t mean the company is off the hook — TGT refiled their lawsuit earlier this month with new accusations against Meli.
The next fight will be over whether or not to name the victims and witnesses associated with the case. Meli’s lawyers also want whatever evidence the government has showing Meli working directly with or attempting to defraud individuals in the entertainment business. The government has until Sept. 30 to respond to the demand with U.S. Attorney Kim telling Meli’s attorney Daniel Fetterman that saying “the indictment, and the discovery produced to date more-than-adequately advise the defendant of the charges against him.”
Fetterman pushed back that the “indictment does not provide Mr. Meli with information necessary to prepare his defense at trial,” and said, “under the law, the Government must provide Mr. Meli with the identities of all unnamed investors.”
Fetterman also wrote that “among the over one million documents and two million pages produced,” prosecutors claim “twenty different Broadway shows, bands, singers, and live performance events” have been influenced by Meli.
“The universe of possible evidence is so vast that Mr. Meli does not know which of the various ticket transactions are purportedly fraudulent,” Fetterman wrote. “Information necessary for his defense at trial. These critical details constitute the very foundation of the criminal charges levied here, and ample legal authority supports Mr. Meli’s request.”
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