Principals Of ‘Pre-IPO’ Funds Plead Guilty To Defrauding Investors

Press Release Principals Of ‘Pre-IPO’ Funds Plead Guilty To Defrauding Investors Friday, January 30, 2026 Share FacebookLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. XLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. LinkedInLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. Email For Immediate Release U.S. Attorney's Office, Southern District of New York Mario Gogliormella, Steven Lacaj, and Karim Ibrahim Defrauded Investors of $185 Million by Selling Shares in Non-Public Companies at Arbitrarily Inflated Prices and by Pocketing Hidden Markups United States Attorney for the Southern District of New York, Jay Clayton, announced today that MARIO GOGLIORMELLA, STEVEN LACAJ, and KARIM IBRAHIM, a/k/a “Chris Hayes,” pled guilty to conspiracy and fraud charges in connection with their management of L & G Capital Corp., Legend Venture Partners LLC, and a related series of funds. GOGLIORMELLA and LACAJ pled guilty before U.S. District Judge Vernon S. Broderick and IBRAHIM pled guilty before U.S. Magistrate Judge Henry J. Ricardo. The defendants will be sentenced before Judge Broderick at a later date.“Our pre-IPO markets are important to investors, entrepreneurs, and our economy,” said U.S. Attorney Jay Clayton. “Their integrity is critical to our continued leadership in technology, healthcare, energy, and other key industries. The defendants used high-pressure sales tactics, false and misleading disclosures, and hidden exorbitant fees to defraud retail investors seeking to invest in private companies that had not yet had initial public offerings. The women and men of our Office and our law enforcement partners continue to focus on our pre-IPO markets and our listed small-cap markets. Our message is clear: marketing and trading in securities of new and smaller companies does not give you a pass to commit fraud.”According to the allegations contained in the Indictment, public filings, and statements made in court:GOGLIORMELLA, LACAJ, and IBRAHIM engaged in a scheme to defraud investors in a group of related private funds known generally as the “StraightPath Funds” and the “Legend Funds.” The defendants, and others working at their direction, used “boiler room”-style call centers to market the funds to non-professional investors by promising an opportunity to invest in privately held companies expected to go public in the near future (“pre-IPO companies”). The defendants purported to offer investors the chance to acquire shares in pre-IPO companies at favorable prices in advance of an anticipated public offering, at which time, they claimed, the shares would be worth significantly more. The defendants also claimed there were no upfront fees or commissions, and that they would not get paid until their investors got paid.These representations that the defendants made to investors were lies. In fact, the defendants sold shares to investors at arbitrarily inflated and excessive prices without disclosing to investors the nature or extent of the markup. The defendants’ fraudulent misrepresentations about the operation of their funds allowed them to raise approximately $185 million from hundreds of investors. Based in large part on the excessive and undisclosed share price markups they charged to investors, the defendants were able to divert nearly $28 million in investor funds to themselves. They also used investor funds to pay their sales representatives at least $17.5 million in fees and commissions, despite making explicit representations to investors that fees were not being charged. In addition to misrepresentations about fees and markups, the defendants also misled investors regarding the nature of their investments and hid the involvement of GOGLIORMELLA and IBRAHIM, who had previously been disciplined by the Financial Industry Regulatory Authority, in the management of the Funds.In order to generate interest in the Funds among retail investors, GOGLIORMELLA, LACAJ, and IBRAHIM used finders, or “referral agents,” to pitch prospective investors and thereafter to serve as the investors’ primary point of contact. The defendants used “boiler room”-style call centers wherein salespeople cold-called potential investors, many of whom were not experienced investors, and gave aggressive sales pitches using notes and pitch scripts. The defendants referred to their pitch scripts as “The Bible.” Contrary to the defendants’ claim that they and their agents did not make money unless and until investors received a profit on their investments, the defendants paid referral agents a commission, typically a 10 to 15 percent front-end fee based on the amount of the investment that agents were able to draw to the Funds, plus a portion of the carried interest when the Funds exited their position in a particular company.At first, the defendants operated this scheme as a marketing arm for StraightPath Venture Partners, Inc. (“StraightPath”). In approximately 2021, multiple individuals associated with StraightPath received subpoenas from the SEC, and in approximately February 2022, StraightPath ceased operations. In approximately February 2022, when StraightPath ceased operations, GOGLIORMELLA, LACAJ, and IBRAHIM began conducting the scheme under the corporate entity Legend Venture Partners, LLC (“Legend”), where they continued to run the same scheme that StraightPath had started. The three principals of StraightPath —Michael Castillero, Francine Lanaia, and Brian Martinsen—were also prosecuted by this Office and convicted at a trial before U.S. District Judge Jesse M. Furman in November 2025.* * *GOGLIORMELLA, 48, of Manhasset, New York, STEVEN LACAJ, 28, of New York, New York, and KARIM IBRAHIM, 36, of Queens, New York, each pled guilty to one count of conspiracy to commit securities fraud, wire fraud, and investment adviser fraud, which carries a maximum sentence of five years in prison, and one count of investment adviser fraud, which carries a maximum sentence of five years in prison.The maximum potential sentences in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.Mr. Clayton praised the outstanding work of the U.S. Postal Inspection Service. Mr. Clayton also thanked the U.S. Securities and Exchange Commission, which has filed a parallel civil action.The case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Adam S. Hobson and Matthew R. Shahabian are in charge of the prosecution. Contact Nicholas Biase, Shelby Wratchford(212) 637-2600 Updated January 30, 2026 Topic Securities, Commodities, & Investment Fraud Component USAO - New York, Southern Press Release Number: 26-015

Press Release Principals Of ‘Pre-IPO’ Funds Plead Guilty To Defrauding Investors Friday, January 30, 2026 Share FacebookLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. XLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. LinkedInLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. Email For Immediate Release U.S. Attorney's Office, Southern District of New York Mario Gogliormella, Steven Lacaj, and Karim Ibrahim Defrauded Investors of $185 Million by Selling Shares in Non-Public Companies at Arbitrarily Inflated Prices and by Pocketing Hidden Markups United States Attorney for the Southern District of New York, Jay Clayton, announced today that MARIO GOGLIORMELLA, STEVEN LACAJ, and KARIM IBRAHIM, a/k/a “Chris Hayes,” pled guilty to conspiracy and fraud charges in connection with their management of L & G Capital Corp., Legend Venture Partners LLC, and a related series of funds. GOGLIORMELLA and LACAJ pled guilty before U.S. District Judge Vernon S. Broderick and IBRAHIM pled guilty before U.S. Magistrate Judge Henry J. Ricardo. The defendants will be sentenced before Judge Broderick at a later date.“Our pre-IPO markets are important to investors, entrepreneurs, and our economy,” said U.S. Attorney Jay Clayton. “Their integrity is critical to our continued leadership in technology, healthcare, energy, and other key industries. The defendants used high-pressure sales tactics, false and misleading disclosures, and hidden exorbitant fees to defraud retail investors seeking to invest in private companies that had not yet had initial public offerings. The women and men of our Office and our law enforcement partners continue to focus on our pre-IPO markets and our listed small-cap markets. Our message is clear: marketing and trading in securities of new and smaller companies does not give you a pass to commit fraud.”According to the allegations contained in the Indictment, public filings, and statements made in court:GOGLIORMELLA, LACAJ, and IBRAHIM engaged in a scheme to defraud investors in a group of related private funds known generally as the “StraightPath Funds” and the “Legend Funds.” The defendants, and others working at their direction, used “boiler room”-style call centers to market the funds to non-professional investors by promising an opportunity to invest in privately held companies expected to go public in the near future (“pre-IPO companies”). The defendants purported to offer investors the chance to acquire shares in pre-IPO companies at favorable prices in advance of an anticipated public offering, at which time, they claimed, the shares would be worth significantly more. The defendants also claimed there were no upfront fees or commissions, and that they would not get paid until their investors got paid.These representations that the defendants made to investors were lies. In fact, the defendants sold shares to investors at arbitrarily inflated and excessive prices without disclosing to investors the nature or extent of the markup. The defendants’ fraudulent misrepresentations about the operation of their funds allowed them to raise approximately $185 million from hundreds of investors. Based in large part on the excessive and undisclosed share price markups they charged to investors, the defendants were able to divert nearly $28 million in investor funds to themselves. They also used investor funds to pay their sales representatives at least $17.5 million in fees and commissions, despite making explicit representations to investors that fees were not being charged. In addition to misrepresentations about fees and markups, the defendants also misled investors regarding the nature of their investments and hid the involvement of GOGLIORMELLA and IBRAHIM, who had previously been disciplined by the Financial Industry Regulatory Authority, in the management of the Funds.In order to generate interest in the Funds among retail investors, GOGLIORMELLA, LACAJ, and IBRAHIM used finders, or “referral agents,” to pitch prospective investors and thereafter to serve as the investors’ primary point of contact. The defendants used “boiler room”-style call centers wherein salespeople cold-called potential investors, many of whom were not experienced investors, and gave aggressive sales pitches using notes and pitch scripts. The defendants referred to their pitch scripts as “The Bible.” Contrary to the defendants’ claim that they and their agents did not make money unless and until investors received a profit on their investments, the defendants paid referral agents a commission, typically a 10 to 15 percent front-end fee based on the amount of the investment that agents were able to draw to the Funds, plus a portion of the carried interest when the Funds exited their position in a particular company.At first, the defendants operated this scheme as a marketing arm for StraightPath Venture Partners, Inc. (“StraightPath”). In approximately 2021, multiple individuals associated with StraightPath received subpoenas from the SEC, and in approximately February 2022, StraightPath ceased operations. In approximately February 2022, when StraightPath ceased operations, GOGLIORMELLA, LACAJ, and IBRAHIM began conducting the scheme under the corporate entity Legend Venture Partners, LLC (“Legend”), where they continued to run the same scheme that StraightPath had started. The three principals of StraightPath —Michael Castillero, Francine Lanaia, and Brian Martinsen—were also prosecuted by this Office and convicted at a trial before U.S. District Judge Jesse M. Furman in November 2025.* * *GOGLIORMELLA, 48, of Manhasset, New York, STEVEN LACAJ, 28, of New York, New York, and KARIM IBRAHIM, 36, of Queens, New York, each pled guilty to one count of conspiracy to commit securities fraud, wire fraud, and investment adviser fraud, which carries a maximum sentence of five years in prison, and one count of investment adviser fraud, which carries a maximum sentence of five years in prison.The maximum potential sentences in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.Mr. Clayton praised the outstanding work of the U.S. Postal Inspection Service. Mr. Clayton also thanked the U.S. Securities and Exchange Commission, which has filed a parallel civil action.The case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Adam S. Hobson and Matthew R. Shahabian are in charge of the prosecution. Contact Nicholas Biase, Shelby Wratchford(212) 637-2600 Updated January 30, 2026 Topic Securities, Commodities, & Investment Fraud Component USAO - New York, Southern Press Release Number: 26-015