Tech & Media
WFAN Host Craig Carton Allegedly Defrauded New York-Based Brigade Capital Management
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WFAN Radio Host Craig Carton Arrested, Charged in Fraud Scheme
- THe WFAN Morning Show host, along with a co-conspirator, allegedly defrauded New York-Based Brigade Capital Management of $4.6 million, SI has learned.
The hedge fund allegedly defrauded of $4.6 million by WFAN morning-show host Craig Carton and a co-conspirator is New York-based Brigade Capital Management, SI has learned. The firm’s general counsel, Aaron Daniels, declined to comment.
In 2016, Carton and co-conspirator Joseph Meli enticed Brigade and an unnamed individual investor by explaining that they had options to purchase millions of dollars of sought-after concert tickets at face value, which they could then resell for a hefty profit, alleges a civil complaint today from the Securities and Exchange Commission (SEC). The artists Carton and Meli touted to investors included Adele, Justin Bieber, Barbra Streisand, Katy Perry, Roger Waters, and Metallica. According to the SEC, though, no such agreements ever existed, and Carton used Brigade’s money to pay off extensive personal gambling debts and an earlier investor. (Meli was accused earlier this year of orchestrating a larger, similar fraud involving tickets to Hamilton and other shows; his trial is set for November.)
Back in March, Brigade won firm of the year at the Absolute Return Awards, which recognize the investment world’s best-performing hedge funds. A Bloomberg report from January said that the firm’s main fund returned almost 23% in 2016 and that Brigade has more than $18 billion in total assets under management. The firm describes itself on its website as “specializing in credit investment strategies.”
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It’s not entirely clear from the SEC suit or a parallel criminal complaint also filed today against Carton and Michael Wright, a New Jersey-based strip club executive and an alleged co-conspirator, why Brigade failed in vetting Carton and Meli. There was at least one red flag.
Last December, according to the complaints, Brigade agreed to wire $2 million to an unnamed sports and entertainment venue company as a payment for future tickets, even though the company had never been contacted to confirm its supposed business relationship with Carton. Allegedly, Carton falsely told Brigade that the fund’s employees wouldn’t be able to speak with the venue company before making the deposit because its executives were tied up in meetings. Carton then called the unnamed company and told them to expect an errant $2 million wire from Brigade which would need to be rerouted to Tier One Tickets, a company he owned. The venue company sent the money to Carton, and all told none of it was used to purchase tickets.
Carton and Wright both appeared in federal court in Manhattan on Wednesday afternoon to be formally charged with conspiracy, wire fraud and securities fraud. Both were released on $500,000 bond.