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James Tagliaferri Arrested For Perpetrating Fraud on Investors

On February 21, 2013, James Tagliaferri, an SEC registered investment advisor, was arrested for defrauding investors of his advisory firm, TAG Virgin Islands, Inc. (“TAG”). Additionally, the United States Attorney’s Office in the Southern District Of New York commenced a criminal action against Tagliaferri in the District Court for the District of the Virgin Islands (St. Thomas Division), Index No. 13-cr-00003-CVG-RM-1. The criminal allegations against Tagliaferri include that Tagliaferri received at least $3 million in undisclosed compensation in exchange for investing his clients’ funds in various illiquid promissory notes and securities without disclosing such compensation to his clients. Furthermore, Tagliaferri is alleged to have inappropriately used client funds, including using client funds to make payments to other investors who were demanding positions in their account be liquidated. Additionally, it is alleged that Tagliaferri placed false and fictitious securities investments in clients’ accounts. The U.S. Attorney Preet Bahara for the Southern District of New York stated, “As alleged, James Tagliaferri concocted an elaborate scheme to defraud his clients, including taking millions of dollars in undisclosed compensation in exchange for placing their hard-earned money in certain investments. Financial advisers have a professional and legal responsibility to act in their clients’ best interests which is exactly the opposite of the conduct in which Tagliaferri allegedly engaged.” The US Attorney has charged Tagliaferri with investment adviser fraud, securities fraud, wire fraud, and violations of the Travel Act.

Lax & Neville LLP effectively assists investors, on both a regional and national level, that may have suffered losses as a result of their registered investment adviser’s fraud sales practice abuses, and is actively prosecuting various claims against TAG and Tagliaferri. Please contact our team of securities fraud attorneys for a consultation at (212) 696-1999.

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