State Links $1M Security Sale Scheme To Hackettstown Man

HACKETTSTOWN, NJ — A man from Hackettstown faces a $120,000 penalty from New Jersey’s Bureau of Securities for allegedly selling at least $1,035,516 in unregistered securities among more than 15 investors.

New Jersey’s Acting Attorney General Andrew Bruck announced the penalties against Stephen Cagnassola of Hackettstown in a news release on Tuesday, stating the Bureau of Securities uncovered unregistered security sales between 2012 through 2017.

Bruck also said these sales were tied to companies engaging in Ponzi schemes, with Cagnassola reportedly compensated about $96,204.88 for selling them to the investors.

“The Bureau’s actions send a strong message to businesses and individuals who think they can disregard New Jersey’s securities laws,” said Bruck about this case, as well as another in Bergen County.

“We have a duty to protect investors around the state and we will continue to hold accountable those who try to operate under the radar by failing to register with the Bureau and illegally selling unregistered securities," he continued.

Bruck said some transactions facilitated by Cagnassola took place between May 2012 and July 2017, with the sale of seven unregistered securities with Pension Funding LLC and Pension Income LLC, to six investors, minimally totaling $275,622. The Consumer Financial Protection Bureau and New York Department of Financial Services received complaints on these transactions in August 2015, some alleging that the pension owners were deceived “into borrowing against their pensions,” with hidden, high-interest loans and fees attached.

From about October 2012 through September 2017, Bruck says that Cagnassola was also accused of selling 20 unregistered securities in the amount of $779,894 with promissory notes to about 12 investors, which were called “CD Notes,” though they weren’t certificates of deposits from banks. The companies that issued the notes were tied to Northridge Holdings, Bruck said, an entity that the Bureau of Securities sued in 2019.

“We are putting unregistered agents and companies that sell fraudulent investments to New Jerseyans on notice, Bureau Chief Christopher W. Gerold also said, stressing that securities and the people who offer or sell them need to be registered with the state.

Sean P. Neafsey, Acting Director of the Division of Consumer Affairs, said he encourages investors check with New Jersey's Bureau of Securities before investing, if they have questions.

“As we continue pursuing dishonest individuals and companies that prey on elderly investors we want to remind investors that unregistered securities may be a red flag of fraud,” Neafsey said.

To view the Summary Penalty Order from the state in this case, click here.

Questions or comments about this story? Have a local news tip? Contact me at: jennifer.miller@patch.com.