FAIRFIELD, Conn. -- A former businessman from Fairfield admitted Tuesday in federal court in New Jersey that he scammed investors out of more than $5 million.
James Trolice, 63, and Lee Vaccaro, 45, of Las Vegas, sold investors interests in companies that they claimed held securities that “gave holders the right to buy common stock at a specific price within a certain time frame,” Acting U.S. Attorney William E. Fitzpatrick said.
Trolice at the time was president and owner of Trolice Consulting Services LLC and president and chief marketing officer of eAgency, a California-based company that developed mobile security products.
He admitted in federal court in Newark on Tuesday that he made oral and written misrepresentations concerning the existence, number, validity and term of the “warrants” purportedly owned by the investment companies.
Trolice, who was living in Alpine, N.J., at the time, said he also lied about the amount of money he had personally invested in and raise for eAgency, as well as his position there.
Trolice also admitted that, beginning in January 2011, the dollar amount of interests that he and Vaccaro sold in the investment companies “began to surpass the dollar amount of valid warrants [that they] held," Fitzpatrick said.
“Neither Trolice nor Vaccaro disclosed to investors the risk that their investments would be diluted by the sale of additional interests in the companies,” the U.S. attorney said.
In the end, the investors lost more than $5 million, he said.
Vaccaro admitted his role in the scheme and was sentenced in February to 78 months in federal prison.
U.S. District Judge William J. Martini scheduled Trolice’s sentencing for July 20.
Fitzpatrick credited special agents of the FBI and IRS-Criminal Investigation for the investigation leading to the pleas.
He also thanked the U.S. Securities and Exchange Commission’s New York Regional Office and the New Jersey Bureau of Securities for their assistance.
Handling the case for the government are Assistant U.S. Attorney Daniel Shapiro and Deputy Chief Zach Intrater of Fitzpatrick’s Economic Crimes Unit in Newark.