The government has filed its full sentencing memo on former Craig Carton co-defendant Michael Wright. Here's some highlights:
In furtherance of the scheme, Wright opened a bank account, for which he alone had signatory authority...
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Wright controlled, and was the sole signatory, on a bank account in the name of Tier One Tickets,one of the principal entities used by Carton and Wright to receive fraudulently-obtained investor proceeds. Wright was willingly represented to investors as the Chief Financial Officer of Tier One Tickets. And Wright diverted nearly $2 million in investor proceeds, among other places, to his own personal use, to Carton’s personal bank account, and to repay Carton’s gambling loan to Desmond Finger.
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The debts included money Carton owed to casinos for gambling excursions and gambling loans to individuals like Harvey Klein and Desmond Finger, loans which Wright had solicited on Carton’s behalf and had personally guaranteed.
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Once the Hedge Fund’s investment was received in the Tier One Tickets Account, Wright misappropriated nearly the entire investment. In particular, Wright immediately transferred $966,000 of these funds to an account he controlled, from which he subsequently utilized approximately $250,000 to pay down his own personal home equity line of credit and $690,000 to pay off a gambling loan Wright had solicited for Carton from Desmond Finger, and which Wright had personally guaranteed. As to the remainder of the Hedge Fund’s $2 million investment, Wright spent approximately $40,000 on various personal retail items and to pay off his credit card and transferred approximately a total of approximately $950,000 to Carton’s personal bank account (much of which Carton used to repay debts to casinos).
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Notably, Wright even lied to Carton and Meli, his partners in crime, for the purpose of obtaining more of the Hedge Fund’s investment. In particular, Wright transferred $966,000 of the Hedge Fund’s investment to his own account based upon his false representation, in an earlier email, that Desmond Finger’s group was owed that amount. (GX 248). In reality, however, Finger was owed only $690,000. As noted above, Wright used the remainder of the money to repay his personal home equity line of credit.
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Wright is responsible for approximately $1,389,310 in losses. This figure represents the Hedge Fund’s $2 million investment pursuant to the fraudulent Ticket Jones Contract – which was intended for tickets to concerts at a venue operated by the Sports and Entertainment Company –less $619,689.99 which Carton repaid to the Hedge Fund before the fraud was discovered.
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Wright’s participation – by providing Carton with the wire information needed to misappropriate the investment funds, receiving those funds in an account solely controlled by Wright, and then disbursing the funds for his own and Carton’s personal use – was necessary for the scheme to succeed.
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Moreover, on October 26, 2016, Carton forwarded Wright a term sheet outlining the terms of the Hedge Fund’s investment, which specifically stated, in a section titled “Use of Proceeds” that the investment was to be used “to purchase tickets.” In addition, while Wright did not personally interact with Hedge Fund personnel in soliciting the Hedge Fund’s investment, he well knew that the Hedge Fund sent its $2 million investment not to Carton directly or to a Carton entity, but rather directly to the source of the tickets – i.e., the Sports and Entertainment Company. Indeed, it was from that entity that Wright received the funds, not from the Hedge Fund. Given Wright’s knowledge that the funds had been sent directly to the source of the tickets, it is inconceivable that Wright believed that there was “no[] limit[] in his use of those funds.” (Def. Br. at 9).
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Likewise, Wright was the sole signatory on an account in the name AdvanceM Ltd., an entity used to misappropriate another investment by the Hedge Fund of $700,000. That investment was to be used exclusively for the purchase of tickets to concerts promoted by a large company in the business of promoting concerts (the “Concert Promotion Company,” as identified in the Indictment). The day after the Hedge Fund transferred this investment to Advance Entertainment’s bank account on December 8, 2016, the money was transferred to the AdvanceM account. Days later, on December 12, 2016, Wright transferred $500,000 to repay Carton’s gambling debt to Harvey Klein (which Wright had personally guaranteed) and $200,000 to Carton’s personal account. (GX 2306).
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The facts moreover directly contradict Wright’s assertion that he participated in the fraud because he was “misled” by Carton or because he was too “busy in his work” at a strip club where he is employed as chief operating officer (the “Strip Club”) to realize that he was participating in a fraud (Def. Mem., at 8-9). For one thing, Wright has provided no evidence of the alleged conversation in which Carton purportedly told Wright that Carton was “not limited” in how he could use the Hedge Fund’s investment. To the contrary, Wright’s communications with Carton and Meli show that he knew the funds were to be used to purchase tickets.
Prosecutors say Wright should face 21 to 27 months in prison. Joe Meli has already been sentenced to 6.5 years. (The government sent Carton, on Oct. 11, 2017, a letter “identifying him as one of Meli’s victims.”) Wright, of Upper Saddle River, New Jersey, has his sentencing date set for Thursday March 7th. Barring another delay, Craig Carton learns his fate Friday March 15th.
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