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March 27, 2017

Posted  April 5, 2017

The SEC announced fraud charges and an emergency asset freeze against LottoNet Operating Corp, its CEO David Gray, and its top sales agent Joseph A. Vitale.  The SEC’s complaint alleges that the defendants misrepresented to investors that their money would be used to develop and market LottoNet and that sales agents did not receive commissions.  In fact, at least 35 percent of investor proceeds were allegedly paid to boiler room sales agents in the form of commissions, and LottoNet allegedly siphoned investor funds for personal spending on clothing, wedding-related expenses, and strip clubs.  The SEC complaint further alleges that Vitale, who personally raised at least $1.4 million from investors, used the alias Donovan Kelly in an apparent attempt to hide form investors that he is permanently barred by FINRA. SEC

Tagged in: Misrepresentations, Regulatory Violations, Securities Fraud,