Essex Capital Corporation Its Founder Ralph Iannelli Allegedly Made a Series of False & Misleading Statements & Illusory Personal Guarantees

Have you or a loved one suffered losses in the Essex Capital Corporation alleged fraud? Essex Capital Corporation, and its founder, Ralph T. Iannelli, between 2014 and 2017, made a series of false and misleading statements and illusory personal guarantees to induce investors to invest millions of dollars in Essex’s failing equipment leasing business, according to an SEC Complaint under review by attorney Alan Rosca.

Attorneys Alan Rosca and Paul Scarlato of the Goldman Scarlato & Penny, P.C. law firm, are investigating sales practices by certain investment advisory firms and investment professionals, related to Essex Capital’s alleged investment fraud. Investors who are concerned they may have lost money in Essex Capital’s alleged investment fraud are encouraged to contact attorneys Alan Rosca or Paul Scarlato with any useful information or for a free, no obligation discussion about their options.

“Investment professionals and firms have a duty to adequately investigate investment products before recommending them to their customers,” said Alan Rosca, an investor rights lawyer.  “The due diligence duty require such firms and professionals to, among others, reasonably vet a new investment and investigate any red flags.”  “When those ‘gatekeepers’ fail in their duty to conduct adequate due diligence before recommending an investment, they may be held liable for their customers’ losses.”

Essex Capital Corporation, an equipment leasing company, and its founder Ralph Iannelli, allegedly raised over $80 million from sales of promissory notes to dozens of investors across the country, according to the SEC Complaint.

Essex Allegedly Spent Only $2.3 Million, or 9% of the $20 Million of Capital it Raised from the Sale of Promissory Notes & $6 Million it Raised from Bank Loans for the Stated Purpose of Buying Equipment Essex, by 2014, had only allegedly spent $2.3 million, or roughly 9% of the capital it had raised that year from the sale of $20 million of promissory notes and $6 million raised from bank loans to actually purchase equipment, according to the SEC Complaint under review by attorney Alan Rosca.

Essex and Iannelli then turned to making Ponzi-like payments to investors, whereby “[E]ssex [used] the bulk of its revenues to pay back investors and banks instead of using it to purchase income generating equipment”, the SEC Complaint notes.

Between 2014 and 2016, Essex and Iannelli allegedly sent approximately $65 million of company revenue to pay back investors on interest due on their notes, as well as to satisfy certain bank lenders, the SEC Complaint reports.

What’s more, the SEC has alleged that as Essex’s financial condition plummeted, Iannelli “continued to siphon millions of dollars out of the company in the form of discretionary bonuses and interest-free personal loans to himself,” the SEC Complaint states.

Securities Lawyers Investigating

The Goldman Scarlato & Penny securities lawyers are investigating this matter on behalf of victimized investors.  The law firm represents investors who lose money as a result of investment-related fraud, takes most cases of this type on a contingency fee basis and advance the case costs, and only gets paid for their fees and costs out of money recovered for clients.

Attorney Alan Rosca, a securities lawyer and adjunct professor of securities regulation, has represented thousands of victimized investors across the country and around the world in cases ranging from arbitrations to class actions.

The primary focus – though not only – focus of their investigation is upon the investment professionals and firms that recruited investors to invest in Essex Capital.

What Essex Capital Investors May Do

Investors who believe they lost money as a result of Essex Capital’s alleged investment fraud may contact attorneys Alan Rosca or Paul Scarlato for a free, no-obligation evaluation of their recovery options, at 888-998-0530, via email at rosca@lawgsp.com or scarlato@lawgsp.com, or through the contact form on this webpage.