TRENTON
– Attorney General Peter C. Harvey
has filed suit against a Camden County
man who allegedly used two shell companies,
Chamberlain Worldwide (Chamberlain) and
The Service Group (TSG), to defraud investors
of roughly $1.6 million through the sale
of unregistered securities.
Attorney General Harvey and Bureau of
Securities Chief Franklin L. Widmann filed
a complaint on Wednesday in Superior Court
in Essex County alleging that Nicholas
Marinella, 65, of Oaklyn, engineered two
securities fraud schemes involving Chamberlain
and TSG through which he diverted investor
funds for his own use and benefit. The
complaint, which alleges numerous violations
of the New Jersey Uniform Securities Law,
also accuses his wife, Barbara Marinella,
of fraud with respect to Chamberlain.
TSG and Chamberlain formerly had offices
at 77 Tarragon Court, Thorofare, Gloucester
County. The defendants were not registered
to sell securities in New Jersey.
“Mr.
Marinella claimed that his companies were
engaged in computer services and international
business consulting, but we allege that,
in reality, they served just one devious
purpose – lining Mr. Marinella’s
pockets,” said Attorney General
Harvey. “We will do everything in
our power to secure restitution for these
victims.”
“These
defendants preyed ruthlessly on investors,”
said Securities Chief Widmann. “To
make matters worse, they also tricked
unsuspecting investors into doing their
dirty work, offering them compensation
for recruiting additional investors into
the trap. Sanctions must be imposed against
these defendants.”
From
1997 to 1999 Nicholas Marinella allegedly
sold investment interests in TSG, which
promotional literature described as a
company offering a full range of computer
services, including business computer
hardware, software, communications and
Internet access. The literature promised
investors that they would get their principal
back in six to eight months and represented
that other investors had doubled or tripled
their money. In fact, TSG was not engaged
in any legitimate business, the complaint
alleges.
The
complaint estimates that more than $500,000
was invested in TSG by at least 62 investors.
Although investors were sent a letter
in early 1999 indicating that the TSG
investment program was ending and instructing
investors how to withdraw their principal
and earnings, many investors who requested
to withdraw their investments did not
receive any money, the complaint alleges.
From
1999 to 2001 Nicholas Marinella solicited
investors for Chamberlain, which was touted
as a company that provided services and
products throughout the world related
to planning and structuring business enterprises.
Chamberlain, through the Marinellas, raised
approximately $1.1 million from investors,
who never recovered their principal or
received any earnings.
Investors
in Chamberlain were offered a “Club
Benefits” membership through which
they could purchase “Club Units”
at a cost of $250 per unit. Promotional
materials represented that a single $250
unit could accrue Club Benefits exceeding
$300,000 in just five years. The written
materials encouraged prospective investors
to become “Key Members,” who
could earn additional compensation for
recruiting new members. Barbara Marinella
allegedly processed club memberships,
deposited investor funds into two Chamberlain
bank accounts in Delaware, and created
false investor statements indicating gains
of 11 to 11.5 percent for each investor.
The
lawsuit seeks, among other things, restitution
for investors, disgorgement of illegal
profits and civil monetary penalties.
Deputy
Attorney General Isabella Trifilio is
handling the case for the State. Supervising
Investigator James Lane and Investigator
Gregory Rosta handled the investigation
for the Bureau of Securities.
Investors
are urged to check with the Bureau of
Securities prior to investing to determine
whether the investment they are considering
and the person selling it are registered
with the Bureau as required by law. The
Bureau of Securities can be reached at
973-504-3600 or through
the Division of Consumer Affairs Web site
www.state.nj.us/lps/ca.
