The Fyre Festival co-founder, who has already pleaded guilty to two counts of wire fraud, has been accused of operating a fraudulent ticket sales platform, NYC VIP Access
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Jason Nissen, the CEO of National Event Company, is being sued by two investors over allegations the business is little more than a front for a ponzi scheme
By Jon Chapple on 07 Jun 2017
A New York judge has ordered the seizure of cash, property, shares and other assets from a ticket broker who allegedly conned investors out of US$32 million to prop up a “basic yet audacious” ticket-selling scam.
Jason Nissen and eight of his companies are accused of funnelling more than $120m through a ponzi scheme in which investors were promised “impossibly high returns” on resold tickets for events including Broadway musical Hamilton, Adele’s Adele Live 2016/2017 world tour, the Super Bowl and several other sporting events. In reality, allege prosecuting lawyers Morrison Cohen, “the ‘returns’ on the ticket sales were illusory, financed by cash infusions from new investors who were told their money would be used to purchase tickets for resale”.
The two investors who brought the lawsuit, Taly USA Holdings and SLL USA Holdings, said in the initial complaint they have been “damaged in an amount to be determined at trial, but believed to be in excess of $25m, plus interest”.
According to the complaint, Nissen confessed he had faked financial documents in order to secure investment from Taly and hide the scam from other investors. “They’re inflated numbers,” he allegedly told Taly’s Yaron Turgeman in a phone conversation. “We really had those events and really sold the tickets and they’re inflated, you know, two- to three-fold depending on how it was.”
In a court order yesterday, judge O. Peter Sherwood authorised New York sheriffs to seize five of Nissen’s bank accounts, his stocks and shares in two companies (New World Events Group and National Events of America) and two properties, both in New York, with all monies held until the conclusion of the case.
“The ‘returns’ on the ticket sales were illusory, financed by cash infusions from new investors”
In addition, Nissen is forbidden from making “any sale, assignment or transfer” or property or money “in which the defendants have an interest as will satisfy $25m” to any person other than a sheriff.
While the case continues, Sherwood says he believes the Taly and SSL “have a cause of action for a money judgment against the defendants for no less than $25m” and that “plaintiffs are likely to succeed”.
Nissen’s National Event Company (NEC) was part of the National Association of Ticket Brokers (NATB), roughly equivalent to the Association of Secondary Ticket Agents (ASTA-UK) in the UK, prompting criticism from some outlets about the association’s effectiveness in policing its members.
In a response provided to TicketNews, NATB says the criticism is unfounded, suggesting it is “outlandish […] to suggest that our trade association should have known about it and taken measures about it before law enforcement did”.
Hamilton last summer became the most expensive ticket in Broadway history after producers raised the price in response to touts taking a reported $30,000 out of every show.
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