Angelo Alleca Pleads Guilty to Orchestrating a Multi-Million Dollar Fraud Scheme

Million Dollar Fraud Scheme
Million Dollar Fraud Scheme

Former CEO of Summit Wealth Management Pleads Guilty to Orchestrating a Multi-Million Dollar Scheme

ATLANTA – Angelo Alleca, the former CEO of Atlanta, Georgia, based Summit Wealth Management, has pleaded guilty to conspiring with a former business partner to defraud investors of over $35 million dollars. Alleca marketed several funds that were supposed to invest in certain assets/investments, such as hedge funds managed by a professional money manager or debt.  Instead he used the money to pay redemptions to earlier investors, to acquire and operate several businesses, and to pay personal expenses.

“Instead of fulfilling promises of investments, investors were largely swindled out of their money in a Ponzi scheme which directly enriched Alleca,” said U.S. Attorney John Horn.  “This case serves as another reminder that investors need to be careful, and do their research when deciding who to trust with their hard-earned money.”

“The guilty plea of Mr. Alleca is the culmination of a lengthy and extensive federal investigation examining the allegations of many years of financial fraud which victimized so many investors out of millions of dollars.  It is the FBI’s hope that today’s guilty plea will provide some sense of relief to those victims that have suffered so much by Mr. Alleca’s greed driven criminal conduct,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office.

According to U.S. Attorney Horn, the indictment, and other information presented in court: From on or about 2004 until 2012,  Alleca acted as the President and Chief Operating Officer of Summit Wealth Management, an investment adviser headquartered in Atlanta, Georgia. During that time, Alleca started several funds and falsely misrepresented that money would be invested in hedge funds and debt securities and managed by professional investment managers.

Instead of investing the money as advertised, Alleca allegedly lost a substantial portion of the funds through securities trading. In addition, Alleca improperly used the funds to operate Summit Wealth Management, make interest payments and redemptions to earlier investors, and to pay personal expenses. During the course of the scheme, fraudulent account statements were mailed to investors showing gains, when there was no money in the funds.

In 1997 Alleca and Mark Morrow, a co-defendant in the case, and Alleca’s former business partner, formed Summit Capital Trading, a registered investment advisor and broker dealer in New York and Ohio.  Alleca led the Buffalo, New York office and Morrow ran the Cincinnati and Cleveland, Ohio offices.

In 2007, Morrow established Detroit Memorial Partners LLC, which sold promissory notes to acquire and manage cemeteries in Michigan.

Between 2007 and 2012, Morrow and Alleca marketed promissory notes in Detroit Memorial Partners to Summit Wealth clients in Atlanta, and throughout the country. Detroit Memorial Partners offered documents which contained material misrepresentations, including that the notes would be secured by real property.  In fact, no security interest was ever recorded with respect to the notes. Moreover, shortly after receiving the note proceeds, Alleca and Morrow, diverted funds for improper purposes including, making interest payments and redemptions to investors in Summit Wealth Management funds and personal expenses.  The indictment alleges that as a result of their fraud schemes, over 300 investors lost over $35 million dollars invested in the Summit Funds and Detroit Memorial Partners LLC.

Sentencing for Angelo Alleca, 46, of Buffalo, New York, is scheduled for August 4, 2016 at 2:00 p.m., before United States District Judge Leigh Martin May.

This case is being investigated by the Federal Bureau of Investigation.

Assistant United States Attorney Jeffrey Brown is prosecuting the case.

For further information please contact the U.S. Attorney’s Public Affairs Office at USAGAN.PressEmails@usdoj.gov

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or (404) 581-6016.  The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga

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