Pearlman Sales Agent Sentenced

ORLANDO, FL—U.S. Attorney Robert E. O'Neill announces that U.S. District Judge Mary Scriven today sentenced Samuel Troncalli (age 70) to one year and one day in federal prison for his role in an investment fraud scheme perpetrated with Louis J. Pearlman. As part of his sentence, Troncalli was ordered to pay $2,085,065 in restitution to his victims. The court also imposed a money judgment in the amount of $95,000, which represented the value of the commissions that Troncalli received from the scheme.

According to his plea agreement, Troncalli signed a Stipulation and Consent Agreement on April 20, 1998 with the state of Florida that barred him from selling unregistered securities. Despite that prohibition, Troncalli began selling investments in 1999 in violation of the Consent Agreement through an unregistered security named Employee Investment Savings Account (EISA).

Troncalli sold the EISA program to 35 individuals who invested a total of $2,085,065. Troncalli never disclosed to his EISA investors the facts that he was the subject of a cease and desist order for selling unregistered securities and that he was not licensed to sell securities.

In 2006, the State of Florida, Office of Financial Regulation (“OFR”) began an investigation into the EISA program. As part of that investigation, a letter was sent to Troncalli on June 15, 2006 advising him that the EISA program was under investigation. In June 2006, Troncalli met with Pearlman and two individuals and formulated false responses to the OFR. On June 21, 2006, Troncalli sent a letter to OFR falsely denying that he had ever sold the EISA program.

Troncalli did not disclose to any of his investors that the OFR was conducting an investigation and that he had falsely represented to OFR that he had never sold the EISA program. By withholding that information, Troncalli was able to continue receiving commission checks for selling the EISA program in June 2006. From 1999 through 2006, Troncalli received approximately $95,000 in commissions from the sale of the EISA program.

This case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service, and the State of Florida, Office of Financial Regulation. It was prosecuted by Assistant United States Attorney Daniel W. Eckhart and Roger B. Handberg.