Sparta Businessmen Plead Guilty to $528M Fraud Scheme

Joseph Passalaqua and Raymond Pirrello face up to 45 years in prison for defrauding investors through their investment company Late Stage Management LLC.

Mar. 13, 2026 at 1:04am

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Joseph Passalaqua and Raymond Pirrello Jr., two businessmen from Sparta, New Jersey, pleaded guilty in federal court to a $528 million fraud scheme involving their investment company Late Stage Management LLC. The pair admitted to making material misrepresentations to investors about fees and the nature of their investments, ultimately diverting millions in undisclosed fees to themselves and their co-conspirators. They now face up to 45 years in prison for their crimes.

Why it matters

This case highlights the ongoing problem of investment fraud schemes that target unsuspecting investors, often through false promises and misleading information. The large scale of this fraud, involving over $500 million, demonstrates the significant impact such crimes can have on individuals and communities. It also raises questions about regulatory oversight and investor protections in the financial industry.

The details

According to the U.S. Attorney's Office, Passalaqua and Pirrello, through their company Late Stage Management LLC, promised investors no upfront fees for investing in pre-IPO stocks. However, they actually marked up the sales by 10-100%, generating approximately $88 million in undisclosed fees between March 2019 and July 2022. During that time, Late Stage raised around $528 million from investors.

  • On March 3, 2026, Passalaqua and Pirrello pleaded guilty to three counts in federal court.
  • The fraud scheme took place between March 2019 and July 2022.

The players

Joseph Passalaqua

A Sparta, New Jersey businessman and co-founder of Late Stage Management LLC, who pleaded guilty to charges related to the $528 million fraud scheme.

Raymond Pirrello Jr.

A Sparta, New Jersey businessman and co-founder of Late Stage Management LLC, who pleaded guilty to charges related to the $528 million fraud scheme.

Robert Cassino

An additional defendant from Elmont, New York and a sales office head who was involved in the fraud scheme.

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What they’re saying

“For years, the defendants brazenly lied to investors all over the country about the fees associated with their investments. The defendants diverted millions of dollars in undisclosed mark-up fees to pay themselves and their coconspirators. Our Office will vigorously prosecute those who lie to innocent investors and deprive them of their hard-earned money to benefit themselves.”

— Joseph Nocella Jr., U.S. Attorney for the Eastern District of New York (U.S. Attorney's Office)

What’s next

The judge will decide on Tuesday whether to allow Walker Reed Quinn, the man accused of vandalizing Waymo vehicles, to be released on bail.

The takeaway

This case highlights the ongoing need for stronger investor protections and regulatory oversight to prevent such large-scale fraud schemes from occurring and harming innocent individuals. It also underscores the importance of thorough due diligence when making investment decisions.