NEW YORK CRIME Founders of Starship Snacks Arrested And Charged With Securities And Wire Fraud
Founders of Starship Snacks Arrested And Charged With Securities And Wire Fraud
Lisa Bershan, President and CEO of Starship Snacks Corp. On Wednesday, October 11, 2017, the Justice Department announced the arrest and unsealing of a 3-count indictment against Lisa Bershan, 65, her husband Barry B. Schwartz, 71, and Joel J. Margulies, 72. The trio is charged with securities fraud, wire fraud, and conspiracy to commit those offenses.
According to the complaint filed in Manhattan federal court, the defendants created the Starship Snacks company with the stated goal of developing and marketing caffeinated chocolate snacks. Over a two-year period they raised more than $2 million from around 50 investors based on misrepresentations including that investments in Starship were guaranteed against losses, and that Starship was going to be acquired by Monster Beverage Corporation, a publicly traded company best known as the manufacturer of Monster Energy drink. The complaint also alleges that Starship was not engaged in actual business operations, and had no intellectual property.
Lisa Bershan was held out as the President, CEO, and founder of Starship, Schwartz was the Secretary, and Margulies was an employee and marketing expert.
The defendants allegedly represented to investors that they could purchase shares in Starship with no downside risk because the company and Lisa Bershan would repurchase shares at the original $3 purchase price plus 5% interest after one year if the shares failed to meet lofty expectations. Bershan allegedly sent an email to a prospective investor containing an image of herself inside a mansion with the subject line “Take the house”, and another email containing images of the interior and exterior of the same house with the subject line “Just a glimpse- my parents sure as hell didn’t leave me this”.
In August 2015, Margulies allegedly sent an email to an investor that stated that representatives of Monster wanted to develop a caffeinated snack and had asked Bershan to develop the product.
In October 2015, he allegedly sent an email to multiple investors announcing that a deal had been reached for a one to one share exchange of Starship for Monster. Monster traded at around $45 a share at the time.
According to FBI Special Agent Angela Tassone, Lisa Bershan did not own the home depicted in the emails to potential investors, Bershan never worked for Monster, and Starship was never involved in negotiations with Monster.
The defendants are also accused of misappropriating investor funds for personal expenses including $39,098 spent on plastic surgery, $37,433 spent on pet care, $11,913 paid to a Mercedes dealership, and $282,965 spent on rent for a Manhattan apartment.
If found guilty of securities or wire fraud, the defendants could face up to 20 years in prison. The charges also carry a maximum fine of $5 million.
Assistant U.S. Attorney Robert Allen is in charge of the prosecution.
The defendants are presumed innocent until proven guilty.
In a separate action, the SEC filed civil charges against Bershan, Schwartz, and Margulies. Among other things, the complaint states that “investors in Starship…lost their money” and seeks a final judgement ordering the defendants to give up their ill-gotten gains and to pay civil penalties. The complaint also demands a trial by jury. According to the SEC, venue lies in the Southern District of New York because Bershan and Schwartz opened bank accounts in the name of Starship in the District, and investor funds were wired to those accounts. The complaint also reveals that Bershan and Schwartz reside in San Diego, California, and that Margulies resides in Murfreesboro, Tennessee. Posted on November 5, 2017 Tags Con Artists, Securities Fraud, Starship Snacks Leave a comment on Founders of Starship Snacks Arrested And Charged With Securities And Wire Fraud CONTACT
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