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Tampa day-trader firm accused of defrauding customers

TAMPA — His peppy online profile tells of a passion for helping others reach their maximum potential. His day-trader firm, Traders Cafe, roosted briefly on the 26th floor of downtown Tampa's Rivergate Tower, touting low fees and high leverage for investors willing to pool their money.

But Matthew Pasquale Ionno wasn't what he pretended to be, according to court records.

Instead of helping people make money, he and a conspirator defrauded customers of $473,742, federal authorities say. More than $181,000 was withdrawn as cash from bank tellers and automatic teller machines, court records state.

Ionno is now a defendant in three cases pending in federal criminal and civil courts.

In the criminal case, the U.S. Attorney's Office has filed a signed plea agreement in which Ionno admits to conspiracy to commit wire fraud. The Securities and Exchange Commission also filed a complaint recently. And Ionno is a defendant in a federal lawsuit that an investor brought last fall against him and four other men.

Neither the criminal complaint nor the securities complaint names the conspirator, who also is described as Ionno's business partner. Corporate records show multiple associates. Ionno, 34, could not be reached for comment.

He used social media and Internet sites to identify and recruit existing and potential day traders and then led them to believe Traders Cafe — at times, called Traders Cafe Worldwide — was a successful firm run by knowledgeable, seasoned traders, his plea agreement states.

Although Ionno purports online to have a bachelor's degree from the University of South Florida, a USF spokesman said he was never enrolled.

Nor did he register with the Securities and Exchange Commission. Neither he nor his business partner were associated with a registered broker-dealer when they opened Traders Cafe, records state.

The conspirators falsely represented that they were licensed and compliant with securities laws, the plea agreement states.

And those aren't the only false claims cited.

"There was no proprietary trading platform, no secured escrow account, no segregated trading accounts, and commissions were not calculated or earned as represented," the plea agreement states.

The partner told one customer that Traders Cafe had $15 million in day-trading accounts when records showed the balance never surpassed $367,000, the SEC complaint states.

The conspirators reported having two full-time risk controllers and procedural safeguards to protect against single traders harming the firm.

But the greater threat came from the top, as described in the court records.

In August, one customer wired Traders Cafe $50,000 to open an account. When he logged into the account, he noticed that he had only a $30,000 balance. He learned that Traders Cafe had relayed only $30,000 to the London broker-dealer who held the firm's master account.

"Traders Cafe's own bank records show a series of cash withdrawals totaling $19,000 in the two days following this customer's $50,000 wire," the securities complaint states.

The firm, which was started in 2012, had less than $1,200 in its accounts by late 2013.

It rented space on Franklin Street before moving into the tower known as the "beer can building." A Traders Cafe website still depicts the Rivergate Tower as its "world headquarters."

Peter Seller, CEO of the executive suites company that leased to Traders Cafe, said the tenants left owing rent. "They vanished in thin air," he said.

Ionno is expected to plead guilty at a July 16 hearing. The charge of conspiracy to commit wire fraud is punishable by a maximum of five years in prison and a fine of up to $250,000. In the signed plea, he agrees to make restitution and the government seeks a judgment against him for $473,742.

Patty Ryan can be reached at (813) 226-3382 or pryan@tampabay.com.

Tampa day-trader firm accused of defrauding customers 07/06/14 [Last modified: Sunday, July 6, 2014 11:21pm]
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