South Jersey Couple Must Pay $5 Million in Investment Scam
Posted on: Wednesday, 25 January 2006, 12:00 CST
By Troy Graham, The Philadelphia Inquirer
Jan. 25--A Superior Court judge has ordered a Camden County couple to pay nearly $5 million in penalties and restitution for bilking investors in two shell companies.
In a 2004 lawsuit filed in Essex County, the state Attorney General's Office accused Nicholas Marinella, 67, of Oaklyn, of forming Chamberlain Worldwide and the Service Group to defraud investors through the sale of unregistered securities.
Marinella's wife, Barbara, also was accused of fraud for her involvement with Chamberlain Worldwide. The couple set up the companies at their former residence in the Thorofare section of West Deptford.
Nicholas Marinella solicited investors in each company even though he was not registered to sell securities in New Jersey, state authorities said.
The Marinellas were ordered to pay back $1.6 million to more than 780 investors. Judge Kenneth S. Levy, presiding in Essex County, also ordered $3.3 million in civil penalties.
"Mr. Marinella promised big returns to investors, claiming his companies offered cutting-edge computing and business services to a worldwide clientele," said Franklin L. Widmann, chief of the attorney general's Bureau of Securities. "In fact, these companies were nothing but shells."
The state Division of Criminal Justice was looking into whether a criminal investigatioin should be launched, a spokesman said.
The Marinellas represented themselves in the case. They do not have a listed phone number in Oaklyn.
Nicholas Marinella was accused of selling $500,000 in investment interests in the Service Group between 1997 and 1999. His literature said the company provided computer services and promised that investors would earn back their money in six to eight months. In fact, the company "was not engaged in any legitimate business," the Attorney General's Office said.
Marinella was accused of soliciting $1.1 million for Chamberlain from 1999 to 2001 by offering "club units." He claimed that a single $250 unit could accrue "club benefits" worth $300,000 in five years. His wife was accused of depositing investor funds and creating false statements showing double-digit investor gains.
Contact staff writer Troy Graham at 856-779-3893 or tgraham@phillynews.com.
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Source: The Philadelphia Inquirer
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