YOU READ IT HERE FIRST: A Bergen County father and son have agreed to pay $5.5 million — including $4 million full restitution — for conning more than 30 victims out of investments they used to buy two Maseratis and a Ferrari, among other goodies for themselves.
Other family members benefitted from the money stolen from the investors through the sale of unregistered security notes by George J. Bussanich Sr., 55, of Park Ridge and his 34-year-old son, George Bussanich Jr. of Upper Saddle River, state authorities said.
“This was not a legitimate investment gone bad, but a scam by the defendants to line their pockets and live the high life … on the backs of defrauded investors,” Acting Attorney General John J. Hoffman said.
The younger George Bussanich previously worked for an investment firm that fired him when it discovered his unreported outside activities, including the sale of the unregistered securities, Hoffman said.
A self-regulatory organization last December barred him from associating with any of its members “in any capacity,” he added.
Investors bought notes that carried a 6%-8% annual rate of return and were told that the money would be used for Metropolitan Ambulatory Surgical Center, LLC in Cliffside Park and the senior Bussanich’s other companies, alleges a lawsuit by the New Jersey Bureau of Securities, represented by the state Division of Law.
Contrary to its name, Metropolitan Ambulatory Surgical Center wasn’t a surgical center, but, rather, a holding company controlled by Bussanich Sr., it says.
Among other things, the Bussaniches used investor moneys to buy several homes and seven luxury vehicles – includes two Maserati Quattroportes, a Ferrari F430 Spyder, and a Mercedes ML350 – and to pay for their shopping, dining, airline travel, and entertainment expenses, alleges the state’s lawsuit, filed in Essex County Superior Court.
It says they also made false and misleading statements to their investors. For example, they didn’t tell investors that they weren’t registered with the Bureau of Securities to sell the MASC notes. They also failed to explain that they transferred investor accounts from a Texas custodian to a New Jersey custodian because of the Texas custodian’s concern that the MASC notes might be unregistered securities.
State authorities asked a judge to immediately freeze the assets of everyone named in the suit, appoint a receiver to take title to and possession of their property and review all financial books and records.
They also revoked the agent registration of the younger Bussanich, while preventing him, his father and the Metropolitan Ambulatory Surgical Center from “utilizing the exemptions available from registration under the state’s Securities Law.”
“Without the Bureau’s action, the affected investors would have lost enormous sums of money that the defendants spent on luxury cars, homes, and personal expenses,” Division of Consumer Affairs Acting Director Steve Lee said. “The work of the Bureau of Securities has led to millions of dollars in restitution for these investors.”
Under the terms of the settlement, the Bussaniches and their two companies will pay $4,074,097.06 in full restitution to the affected investors, $1 million in civil penalties ($250,000 of which will be suspended if they comply with the terms of the settlement), and certain other costs.
They are also permanently prohibited from acting as agents, broker-dealers, or investment advisors in New Jersey’s securities industry; from selling or offering securities in New Jersey; and from controlling or acting as officers or directors of any entity that sells securities.
The investigation was conducted by Rudolph G. Bassman, the chief of enforcement for the New Jersey Bureau of Securities, and Supervising Investigator Peter Cole. Deputy Attorneys General Stacy-Ann T. Davy , Victoria Manning and Isabella Stempler of the of the Securities Fraud Prosecution Section in the Division of Law are prosecuting, assisted by Mehnaz Rahim, a Law Division volunteer attorney.
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