NYC Gazette

Earlier today, at the federal court in Brooklyn, a five-count indictment was unsealed charging John Cangialosi, Peter Girgis, Gene Sarabella (also known as “Jerry”), Enrico Carini (also known as “Ed”), and Caner Otar (also known as “John”) with conspiracy to commit securities fraud, conspiracy to commit wire fraud, securities fraud, investment adviser fraud, and money laundering conspiracy. These charges are in connection with their scheme to defraud investors in Max Infinity Management LLC, Elder Fund Management LLC, and related funds collectively referred to as "Max Infinity." The defendants' fraudulent misrepresentations about the operation of the funds allowed them to raise over $60 million from investors and divert approximately $27 million for their benefit and that of other Max Infinity salespeople.

Breon Peace, United States Attorney for the Eastern District of New York, and Christie M. Curtis, Acting Assistant Director in Charge of the Federal Bureau of Investigation's New York Field Office (FBI), announced the charges.

“As alleged, based on false promises the defendants bilked investors out of millions of dollars,” stated United States Attorney Breon Peace. “They lied about how they made money and promised near-certain returns on investment when, in truth, they charged astonishing markups, at times greater than 95%, and defrauded investors. My office will vigorously prosecute those who seek to take advantage of the investing public for their own greed.”

Mr. Peace expressed his appreciation to the Securities and Exchange Commission (SEC) Washington D.C. Home Office for its significant cooperation during the investigation.

“These five defendants allegedly charged undisclosed markup fees to defraud almost $60 million from investors of Max Infinity,” stated FBI Director Curtis. “Luring in investors based on false success stories and concealing additional expenses betrays their belief that the money is being handled appropriately. The FBI will continue to disrupt fraudulent schemes rooted in deceit.”

According to the indictment, Max Infinity was a New York City-based manager of investment funds that bought and sold stock issued by privately held companies anticipating an initial public offering (IPO). Principals Cangialosi, Girgis, and Sarabella along with sales team leaders Carini and Otar engaged in a scheme to defraud investors by misrepresenting various aspects including that Max Infinity took no upfront fees, was registered with the SEC, and sourced pre-IPO shares directly from issuing companies. The defendants also fabricated Max Infinity’s track record—claiming significant profits from prior successful IPOs—when in reality there were no such previous investments.

Cangialosi and Girgis were both under suspension by the Financial Industry National Regulatory Authority (FINRA) at various times but hid their involvement in Max Infinity from investors.

Investors were told that Max Infinity did not make money until customers made money; however, Cangialosi, Girgis, and Sarabella paid themselves distributions out of excessive undisclosed markups charged to investors. From these distributions Sarabella directed over a million dollars towards luxury watches. Salespeople used scripts falsely assuring investors of an impressive track record of success in prior IPO deals while claiming extensive due diligence had been conducted.

The charges are allegations; defendants are presumed innocent unless proven guilty.

In July 2022 Mr. Peace was selected as Chairperson of the White Collar Fraud subcommittee for the Attorney General’s Advisory Committee (AGAC). In this role he makes recommendations aimed at preventing investigating prosecuting financially motivated non-violent crimes including wire fraud similar to those allegedly committed by these defendants.

If you believe you or someone you know was victimized by these defendants please contact FBI via email at maxinfinitytips@fbi.gov or call 1-800-CALL-FBI.

The government’s case is being handled by the Business & Securities Fraud Section with Assistant United States Attorneys Sarah M. Evans Eric Silverberg John O Enright Lorena Michelen leading prosecution supported by Paralegal Specialists Sarah Burn Liam McNett

The Defendants:

JOHN CANGIALOSI

Age: 43

Manalapan New Jersey

PETER GIRGIS

Age: 43

Staten Island New York

GENE SARABELLA (also known as “Jerry”)

Age: 36

Monroe New Jersey

ENRICO CARINI (also known as “Ed”)

Age: 39

Staten Island New York

CANER OTAR (also known as “John”)

Age: 37

Brooklyn New York

E.D.N.Y Docket No 24-CR-363