Former CFO Of Investment Firm Is Part Of $500 Million Federal Fraud Case: DOJ, FBI

PELHAM, NY — Federal prosecutors say that a Pelham man is cooperating in a federal fraud case.

According to an indictment unsealed last week in Manhattan federal court, 59-year-old Damien Alfalla, of Pelham, the former CFO of a private investment firm, 777 Partners, along with 44-year-old Joshua Wander, of Miami, Florida, the cofounder of the firm, and others, are accused of lying to lenders and investors to fraudulently accumulate nearly $500 million.

U.S. Attorney for the Southern District of New York Jay Clayton, Assistant Director in Charge of the New York Field Office of the FBI Christopher G. Raia, and Special Agent in Charge of the New York Field Office of Homeland Security Investigations Ricky J. Patel announced that Wander was charged with conspiracy to commit wire fraud, wire fraud, securities fraud, and conspiracy to commit securities fraud. Wander surrendered to federal agents and was presented before a judge.

Alfalla is also charged with conspiracy to commit wire fraud, wire fraud, securities fraud, and conspiracy to commit securities fraud. He previously pleaded guilty to an information before a judge on October 14, in connection with his participation in the fraud scheme at 777 Partners.

The charges of conspiracy to commit wire fraud, wire fraud, securities fraud, each carry a maximum sentence of 20 years in prison. The charge of conspiracy to commit securities fraud carries a maximum sentence of five years in prison.

"As alleged, Wander used his investment firm, 777 Partners, to cheat private lenders and investors out of hundreds of millions of dollars by pledging assets that his firm did not own, falsifying bank statements, and making other material misrepresentations about 777's financial condition," Clayton said. "When financial firms lie to their lenders, they do not merely breach contracts. They undermine the integrity and stability of our credit markets and our financial system more broadly. America's financial markets are a source of strength and the envy of the world. The women and men of the SDNY and our law enforcement partners will continue to work tirelessly to protect our investors and our markets. We would also like to thank the U.S. Securities and Exchange Commission, which separately initiated civil proceedings against the defendants today."

777 Partners' initial and primary business model was to underwrite and finance structured settlements. The firm financed its purchases of structured settlements by using credit from private lenders. 777 Partners grew to become one of the largest buyers of structured settlements.

But feds say that beginning in 2018, Wander began investing capital from the structured settlement business into new sectors with less certain cash-flow profiles, including streaming platforms, airlines, and professional sports teams such as Sevilla FC and Genoa CFC. Wander directed that restricted funds from 777 Partners' lenders be used to cover the firm's acquisitions and expenses, according to prosecutors.

Wander's spending caused 777 Partners to face significant cash and collateral shortfalls, investigators said. Wander sought to conceal those shortfalls and maintain access to funds by pledging more than $350 million in assets as collateral to certain lenders, knowing that 777 Partners either did not own the collateral or had already pledged the collateral to other lenders, prosecutors contend. Wander also directed employees of 777 Partners to digitally alter bank account statements to reflects millions of dollars in cash on hand that the firm did not have, according to the charges.

In 2021 and 2022, as 777 Partners faced major liquidity constraints, Wander solicited more than $100 million in outside investments in 777 Partners through the sale of cumulative preferred equity membership interests in 777 Partners, investigators said. Wander, Alfalla, and other employees of 777 Partners misrepresented the financial condition of the firm in soliciting these investments, according to the accusations.

By March 2023, the scheme began to unravel, feds say. One of the firm's lenders confronted Wander about allegations of double-pledged assets, and Wander falsely claimed there had been an error caused by 777 Partners' antiquated computer system, according to the allegations. A few days later, Wander again falsely assured the lender, among other things, that the double-pledging had been inadvertent, investigators say.

In October 2024, the High Court in London issued a winding-up order, formally declaring 777 Partners bankrupt. 777 Partners still owes its lenders hundreds of millions of dollars, regulators say.

"Joshua Wander and Damien Alfalla, the cofounder and CFO respectively of the 777 Partners investment firm, allegedly stole more than $500 million from his company's lenders and investors through fabricated lies of success and doctored financial records," FBI Assistant Director in Charge Christopher G. Raia said. "The defendants' alleged deceit targeted the wallets of his trusting stakeholders to obfuscate the failing fiscal ventures of the business. With our law enforcement and prosecutorial partners, the FBI maintains its steadfast determination to disrupt any fraudulent scheme seeking to exploit victims before they're left with millions in losses."

Clayton praised the work of the FBI and HSI. He also expressed appreciation for the assistance of the U.S. Securities and Exchange Commission, which separately initiated civil proceedings.