Ex-Radio Jock Is Convicted of Fleecing Investors in Ticket Scam
(Bloomberg) -- Craig Carton’s voice boomed on radios from Denver to New York over two decades. But sports fans won’t be hearing much from him now as he faces prison for ripping off investors so he could pay his gambling debts and other bills.
Carton was convicted Wednesday of defrauding investors by using fake contracts to raise money for a venture involving the purchase and resale of tickets to high-priced shows, and then using the money for himself.
The 49-year-old former co-host of the most popular morning radio sports-talk show in the New York City area is the biggest celebrity nabbed in a crackdown on the largely unregulated $15 billion ticket-resale industry, where middlemen snatch up blocks of tickets and resell them at inflated prices. His lawyers vowed to appeal.
"I’m obviously disappointed by the verdict today," Carton said outside the courthouse after his conviction, saying his only plans were to go home and hug his kids. "I respect it, but I’m disappointed with it. I need to let it sink in now."
The jury of three men and nine women didn’t buy Carton’s defense that he was the one who was duped by a former partner and strung along by executives.
“These hot shots were playing Mr. Carton,” the radio host’s lawyer Robert Gottlieb told jurors during closing arguments Tuesday. “They were stringing him along. He was a fish on a line. They never told him his ideas were a crock. They were content to lead him down the primrose path.”
Jurors deliberated for less than five hours Wednesday before finding Carton guilty of all three counts -- conspiracy, wire fraud and securities fraud. Carton showed no reaction as the verdict was read. He’s scheduled to be sentenced on Feb. 27 and faces as long as 20 years in prison for each of the wire fraud and securities fraud counts, and five years for conspiracy.
“Carton was all talk," Manhattan U.S. Attorney Geoffrey Berman said. "Carton fabricated contracts for blocks of tickets and spent the almost $7 million he collected from investors on gambling and personal expenses. We commend the jury for seeing through Carton’s blatant lies, and holding him responsible for his Ponzi-like scheme.”
Prosecutors alleged Carton and his accomplices took millions from investors to buy tickets, including Ronald DelGaudio, the owner of a string of pharmacies, who said he gave Carton $1 million to buy Adele tickets in September 2016 and earned a 30 percent return. He lost almost all of a $900,000 investment he made the following year.
Brigade Capital, a hedge fund, agreed to provide a credit line of as much as $10 million and sent $4.6 million to Carton and his business partners for tickets to Barbra Streisand, Metallica and other concerts, prosecutors said. The owner of a medical-supply business on Long Island provided Carton with $450,000 to start a new venture, they said.
Instead of buying tickets, Carton and his partners almost immediately used the cash for other purposes, according to prosecutors. After Brigade Capital in December 2016 wired $700,000 to an account controlled by Carton’s former partner, Michael Wright, he gave $200,000 to Carton, who repaid a debt at the SugarHouse Casino in Philadelphia. Wright sent the other $500,000 to Harvey Klein, one of two men who testified at the trial that they had regularly loaned money to Carton at high interest rates for gambling.
Wright pleaded guilty in September, and two men, including another one of Carton’s partners, Joseph Meli, pleaded guilty last year to a separate scam involving tickets to events including the blockbuster musical Hamilton.
Prosecutors painted Carton as a desperate gambler continually seeking funds to satisfy a mountain of debt, going from one investor to another looking for more sources of capital.
"When Carton ran out of money from one victim, he brought in another victim, telling more lies and stealing more money," Assistant U.S. Attorney Elisha Kobre told the jury during closing arguments.
Carton didn’t testify in his own defense
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