Disgraced Ex-Math Teacher Accused of $70 Million N.Y. FraudBy and
Nissen allegely lied about buying bulk Hamilton tickets
Victims include private equity firm, diamond buyer, U.S. Says
A former New York math teacher allegedly graduated from ripping off his students of a few hundred dollars 14 years ago to scamming investors of more than $70 million today.
Jason Nissen, the chief executive officer of New York-based National Event Co., was charged with raising cash by falsely telling investors he’d use their money to buy and resell wholesale quantities of tickets for premium events including the Super Bowl and the hit Broadway musical Hamilton.
In reality, since at least 2015, Nissen was largely using fresh cash to repay earlier investors, according to New York federal court filings unsealed on Wednesday. He ran out of sources of new funding in May and admitted the scam to two of his victims, prosecutors said.
The case is the second since January to claim that investors were cheated in a scam built around “Hamilton” tickets and other popular concerts, plays and sporting events. Concert promoter Joseph Meli and two others are accused by prosecutors of cheating more than 125 investors -- including billionaires Paul Tudor Jones and Michael Dell, as well as an executive at Och-Ziff Capital Management Group -- out of millions of dollars. Meli has denied wrongdoing.
Nissen is charged with wire fraud. A defense lawyer wasn’t listed in the court docket.
Nissen’s alleged victims include an unnamed diamond wholesaler with offices in Manhattan that loaned him $32 million and a private-equity firm that invested $40 million, according to the court papers. He used some of their cash to buy tickets, but not the vast quantities he claimed, the U.S. said.
The diamond wholesaler made several short-term loans to finance the purchase of tickets to an Adele concert, an Ultimate Fighting Championship match held in New York and the NCAA March Madness basketball tournament, among other events, prosecutors said.
Nissen, a former teacher in the Queens borough of New York City, was fired in 2004, according to Michael Aciman, a spokesman for the New York Department of Education. A year earlier he was caught reselling Dave Matthews Band concert tickets to his students for a profit.
Prosecutors claim Nissen kept his Ponzi scheme afloat by falsifying financial documents and inflating accounts-receivable ledgers that he showed investors.
Nissen has been reselling tickets through his Manhattan-based company since 2012, according to the court filings. He owns 76 percent of the ticket firm through holding companies, with the rest of the brokerage being sold to a private-equity firm that became his first victim, according to the U.S.
The court filing was signed by Joseph Downs, a special agent with the Federal Bureau of Investigation. It includes a transcript of a phone call in which Nissen purportedly admitted to an unnamed executive at the diamond wholesaler that the he’d been ripping him off.
"The reports that you showed us in the return, it was all fake?" the executive asked, referring to a batch of Hamilton tickets, according to the filing.
"No. Some of it was real and some of it was fake," Nissen was quoted as saying. "The numbers are just all multiplied. It’s the real numbers, but multiplied."
Nissen went to the diamond wholesaler’s office the next day to provide the executive and his CFO with details of what he’d done with their money, according to the court filing. The men videotaped the encounter without Nissen’s knowledge, the federal agent said.
According to a transcript of the meeting, Nissen admitted he was using the wholesaler’s money to pay earlier investors, and that he’d forged documents to hide his fraud, including doctoring a bank statement to show a bogus wire transfer.
Asked how he managed to forge the documents, Nissen allegedly replied, "Photoshop. You ever hear of it?" Nissen then asked the men for more money, telling them he would go to jail if they didn’t provide it, according to the federal agent.
"You were running a Ponzi scheme," the diamond wholesaler CFO was quoted as saying.
"I guess you want to call it...I was borrowing from Peter to pay Paul," Nissen replied.
"Yeah," the CFO said, according to the transcript. "That’s the definition of a Ponzi."
The case is U.S. v. Jason Nissen, 17-mj-4096, U.S. District Court, Southern District of New York (Manhattan).
— With assistance by Patricia Hurtado