Investment Adviser Convicted of Defrauding Investors

Earlier today, following a four-day trial, Louis F. Petrossi, the founder and president of the Wealth Research Institute, a purported investment research firm, was convicted by a federal jury in the Middle District of Pennsylvania, of securities fraud, investment adviser fraud and wire fraud for his role in a scheme to defraud investors.  Petrossi falsely claimed to investors that money they had invested in purported investment funds called Chadwicke would be used to invest in startup companies.  Instead, the defendant used the investors’ money to pay for personal expenses, and he issued fraudulent statements that overstated both the cost and value of the securities held by Chadwicke. 

Richard P. Donoghue, United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Division (FBI), announced the verdict.  Mr. Donoghue expressed his appreciation to the United States Attorney’s Office for the Middle District of Pennsylvania for their assistance with the case.

The evidence at trial established that between January 2015 and January 2017, Petrossi solicited more than $1.8 million in investments in one of the Chadwicke funds from more than 25 investors, including one who resides in the Middle District of Pennsylvania.  Petrossi promoted Chadwicke as providing the opportunity to invest in high-profile startup companies such as Lyft, Inc., Maplebear Inc., Pinterest Inc., Spotify Technology SA and Palantir Technologies, Inc., among others.  Petrossi invested approximately $665,400 in privately held startup companies but used more than $1.1 million in investor funds to pay for personal expenses, including payments to BMW, renovations to his home and payment of his personal legal fees.  In or around August 2016, Petrossi sent emails to Chadwicke investors attaching a spreadsheet that contained false and misleading statements about the purchase price and value of the securities held by the Chadwicke funds in order to conceal his misappropriation of investor money.

On May 3, 2016, Petrossi was arrested in Nevada pursuant to an indictment returned by a federal grand jury sitting in the Eastern District of New York for his role in a securities fraud scheme involving the securities of ForceField Energy Inc.  Under the terms of Petrossi’s pre-trial release, the defendant was prohibited from employment “directly involving the handling of investors.”  Between May 3, 2016 and approximately January 2017, Petrossi continued to engage in the Chadwicke scheme by emailing the August 2016 spreadsheet and soliciting $210,000 in investor funds.

Petrossi faces a maximum of 20 years’ imprisonment when he is sentenced by United States Chief District Judge Christopher C. Conner of the Middle District of Pennsylvania.

Petrossi was convicted in May 2017 by a federal jury in Brooklyn for his role in the ForceField Energy Inc. market manipulation scheme.  He faces a maximum sentence of 20 years’ imprisonment when he is sentenced by United States District Judge Brian M. Cogan of the Eastern District of New York.

The government’s case is being prosecuted by Assistant United States Attorney Mark E. Bini of the Eastern District of New York and Special Assistant United States Attorney John O. Enright of the United States Securities and Exchange Commission’s Enforcement Division.

The Defendant:

LOUIS F. PETROSSI
Age:  77
Residence: Reno, Nevada

M.D.P.A. Docket No. 17-CR-192 (CCC)