Investment Fraud Scheme Indictments

Rachel Dollar —  February 2, 2016 — Leave a comment

Angelo Alleca, 46, Buffalo, New York, and Mark Morrow, 54, Cincinnati, Ohio, were arraigned on charges of orchestrating a multi-million dollar investment fraud scheme.  The Defendants marketed several funds that were supposed to invest in certain assets/investments, such as hedge funds managed by a professional money manager of mortgage debt.  According to the new indictment, they instead used the money to pay redemptions to earlier investors, to acquire and operate several businesses, and to pay personal expenses.

According to U.S. Attorney John Horn, the indictment, and other information presented in court: From on or about 2004 until 2012,  Alleca acted as the President and Chief Operating Officer of Summit Wealth Management, an investment adviser headquartered in Atlanta, Georgia. During that time, Alleca started several funds and falsely misrepresented that money would be invested in hedge funds and debt securities and managed by professional investment managers.

Instead of investing the money as advertised, Alleca allegedly lost a substantial portion of the funds through securities trading.  In addition, Alleca improperly used the funds to operate Summit Wealth Management, make interest payments and redemptions to earlier investors, and to pay personal expenses. Morrow served as the administrator of several of the funds.  During the course of the scheme, fraudulent account statements were mailed to investors showing gains, when there was no money in the funds.

In 2007, Morrow established Detroit Memorial Partners LLC, which sold promissory notes to acquire and manage cemeteries in Michigan.  The indictment alleges that between 2007 and 2012, Morrow and Alleca marketed promissory notes in Detroit Memorial Partners to Summit Wealth clients in Atlanta, Georgia, and throughout the country. Detroit Memorial Partners offering documents contained material misrepresentations, including that the notes would be secured by real property when in fact no security interest was ever recorded with respect to the notes. Moreover, shortly after receiving the note proceeds, Alleca and Morrow, diverted funds for improper purposes including, making interest payments and redemptions to investors in Summit Wealth Management funds and personal expenses.  The indictment alleges that as a result of the Defendants fraud schemes, over 300 investors lost over $35 million dollars invested in the Summit Funds and Detroit Memorial Partners LLC.

Alleca and Morrow formed Summit Capital Trading, a registered investment advisor and broker dealer in New York and Ohio in 1997.  Alleca led the Buffalo, New York office and Morrow ran the Cincinnati and Cleveland, Ohio offices.

The defendants are charged with stealing millions of dollars from unsuspecting investors with false promises,” said U. S. Attorney John Horn.  “Their misrepresentations on how funds would be invested serves as a reminder that citizens need to be careful when choosing where to invest their hard earned money.”

The FBI is pleased with the role that it played in bringing this matter forward for prosecution.  While financial restitution to the victim investors remains an issue for another day, it is hoped that these federal criminal charges will provide some solace to those victims,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office.

The case is being investigated by the Federal Bureau of Investigation.

Assistant United States Attorney Jeffrey Brown is prosecuting the case.

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Rachel Dollar

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