BULLETIN: FLORIDA — AGAIN (VIA NEW YORK): SEC Says Men Gathered $8 Million Through Lure Of Nonexistent IPO And ‘Contracts’ With Famous Companies; Angelo Cuomo And Recidivist George Garcy Of E-Z Media Inc. Charged With Securities Fraud
Charged in the civil case were George Garcy, 54, of Aventura, Fla., and Angelo Cuomo, 62, of Staten Island, N.Y. Garcy also is known as Jorge Garcia, and was charged by the SEC in 1997 with improperly selling stock, the SEC said.
Today’s case was brought in federal court in the Eastern District of New York. It involved an offering fraud for a company known as E-Z Media Inc., the SEC said.
“Garcy and Cuomo conducted an offering fraud that was rife with false statements and omissions to entice unsuspecting investors,” said George S. Canellos, director of the SEC’s New York Regional Office. “Instead of using the offering proceeds to develop their business, Garcy and Cuomo treated E-Z Media’s bank account as a personal slush fund and diverted millions of dollars to line their pockets.”
Both Garcy and Cuomo failed to tell investors of E-Z Media Inc. about Garcy’s previous encounter with regulators when he was a California resident, the SEC charged.
As part of the newly detected fraud, E-Z Media investors were told the firm had “contracts” with Heineken, Anheuser Busch and Aramark Corp. for its beverage and -food carrier product, but no contracts existed, the SEC said.
Investors also were lured by the promise of a profitable IPO, but E-Z Media “never took even the basic steps to prepare” for an IPO, the agency said.
The scheme attracted “at least” 200 investors and gathered about $8 million between April 2003 and March 2009, the SEC charged.
Garcy and Cuomo diverted about half of the scheme proceeds to themselves and family members, the agency charged.
A carrier patent E-Z Media purportedly held also was used to lure investors, but the patent was contingent upon a $14.5 million payment to Cuomo and may not have been valid to begin with because “Cuomo had previously transferred his ownership rights” to his sister, the agency charged.
Cuomo’s sister, Judith Guido, 55, received at least $1.7 million from the scheme, the SEC said. She has been named a relief defendant, as have two sons of Cuomo: Ralph Cuomo, 37, and Vincent Cuomo, 31.
The Cuomo brothers received a combined total of at least $240,500 from the scheme, the SEC said.
Also named a relief defendant was attorney Joseph Lively, 55, of Farmingdale, N.Y. Lively received at least $120,000, the SEC said.
The SEC described the payments to the relief defendants as ill-gotten gains, saying none of the relief defendants had any legitimate claim to the money.