NEWARK
– The State has obtained judgments
totaling about $5 million against a Camden
County man, his wife and two shell companies
– Chamberlain Worldwide (Chamberlain)
and The Service Group (TSG) – which
they used to defraud investors through
the sale of unregistered securities, Bureau
of Securities Chief Franklin L. Widmann
announced today.
The
Attorney General’s Office and Bureau
of Securities filed suit in Superior Court
in Essex County in May 2004 alleging that
Nicholas Marinella, 67, 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 alleged numerous
violations of the New Jersey Uniform Securities
Law, also accused his wife, Barbara Marinella,
of fraud with respect to Chamberlain.
Superior Court Judge Kenneth S. Levy has
entered a final judgment against TSG and
Nicholas Marinella in the amount of $1,629,000,
representing $543,000 for restitution
for TSG investors and a civil monetary
penalty of $1,086,000.
Judge
Levy also has entered a final judgment
against Chamberlain, Nicholas Marinella
and Barbara Marinella in the amount of
$3,330,427, representing $1,110,142 for
restitution for Chamberlain investors
and a civil monetary penalty of $2,220,285.
“Mr.
Marinella promised big returns to investors,
claiming his companies offered cutting-edge
computing and business services to a world-wide
clientele,” said Bureau Chief Widmann.
“In fact, these companies were nothing
but shells. These judgments are a significant
step in our efforts to obtain restitution
for the investors who were defrauded by
these defendants.”
Judge
Levy ordered that the defendants be permanently
barred from selling, distributing, promoting
or advertising securities in New Jersey.
The defendants were not registered to
sell securities in New Jersey. Chamberlain
and TSG formerly had offices in Thorofare,
Gloucester County.
Deputy
Attorney General Isabella Trifilio Stempler
handled the case for the State. Supervising
Investigator James Lane investigated for
the Bureau of Securities.
From
1997 to 1999, Nicholas Marinella allegedly
sold more than $500,000 in 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 State alleged.
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, allegedly
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.
