Three men pleaded guilty this week to three counts of conspiracy to commit securities fraud, securities fraud, and conspiracy to commit wire fraud in a federal court in Brooklyn.
The defendants are Raymond John Pirrello, aka Ray John, 49 of Sparta, New Jersey, Joseph Passalaqua, age 37, of Sparta, New Jersey, and Robert Cassino, age 63, of Long Beach, New York.
Co-defendant Robert Cassino pleaded guilty to wire fraud conspiracy on February 18, 2026. The proceedings were held before United States District Judge Kiyo A. Matsumoto. When sentenced, Pirrello and Passalaqua face a maximum sentence of 45 years’ imprisonment and Cassino will face a maximum sentence of 20 years’ imprisonment.
Another co-defendant, Joseph Rivera, age 45 of Elmont, New York, previously pleaded guilty.
Joseph Nocella, Jr., United States Attorney for the Eastern District of New York and James C. Barnacle, Jr., Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office, announced the guilty pleas.
“For years, the defendants brazenly lied to investors all over the country about the fees associated with their investments,” stated United States Attorney Nocella. “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.”
Nocella expressed his appreciation to the U.S. Securities and Exchange Commission (SEC), New York Regional Office, for their work on the case.
As detailed in the superseding indictment and other court filings, Pirrello, Passalaqua, Cassino and their coconspirators engaged in a scheme to defraud investors and prospective investors in securities offered by the company Late Stage Management, LLC (Late Stage). Late Stage was a New Jersey-based manager of investment funds that offered investors “no fee” opportunities to invest in “Pre IPO” stocks, i.e., shares of stock in companies that anticipated an initial public offering (IPO) in the near term. Late Stage worked with several sales offices throughout New Jersey, New York and Florida to market the investments, including Prior2IPO and Pre IPO Marketing, Inc.
gov.uscourts.nyed.506987.1.0 by scott.mcclallen
Pirello, also known as “Ray John,” held no official title at Late Stage or any of the sales offices, but worked as a partner to the leadership of Late Stage. Due to his long disciplinary history with multiple regulators, which included a permanent bar issued against him by the SEC, Pirrello intentionally kept his name out of Late Stage’s business, purposefully withholding his identity from relevant documents and representations made to investors regarding the firm’s leadership. Passalaqua worked alongside Pirrello at Prior2IPO as the Chief Executive Officer. Cassino led operations at Pre IPO Marketing, Inc. Pirrello and his co-conspirators directed the heads of the sales offices on how to market Late Stage to investors.
Pirrello, Passalaqua, Cassino and the other heads of the other sales offices then made material misrepresentations and omissions to investors and potential investors in Late Stage relating to, among other things, the existence and amount of fees paid by investors in stock offered by Late Stage and how the defendants would be compensated. For example, they claimed that the only time Late Stage profited was on exit, when the company made its IPO or sold to a larger company, in which case it would be entitled to a 20 percent share of the investor’s profits. In reality, however, Late Stage charged fees in the form of upfront markups ranging from 10-100 percent of each investment. The upfront revenue generated by the inclusion of these markups was then used to pay the principals of Late Stage, including Pirrello, Passalaqua, Cassino and the employees of the sales offices. In total, between approximately March 2019 and July 2022, sales offices working on behalf of Late Stage raised approximately $528 million from investors and diverted approximately $88 million in undisclosed upfront markups.
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Jessica K. Weigel and James R. Simmons are in charge of the prosecution, with assistance from Paralegal Specialists Melina Piatti-Chayan and Liam McNett.