A lawsuit has been filed alleging a decade-long fraudulent scheme involving a network of sham companies and false funding promises that defrauded investors out of millions. The complaint accuses Nicholas Del Franco of orchestrating a scheme using multiple shell corporations, including Ares 2811 Corporation, to create an appearance of legitimacy while diverting investor funds through deceptive practices.
According to the complaint, Del Franco, along with associates including Judith Etman and Martin Karo, used their purported credentials to gain the trust of investors. Etman is described as a real estate developer, while Karo is identified as an escrow agent whose role allegedly provided credibility to fraudulent transactions.
One cited example involves Sean Sullivan, who sought a $10 million loan for a construction project in Turks and Caicos. Sullivan was told he needed to pay $1 million in prepaid interest, which was covered by Wallace Cheves with the expectation of repayment. After Cheves transferred the money into an escrow account, the promised funds were never released, and delays ensued.
The lawsuit alleges violations under the Racketeer Influenced and Corrupt Organizations Act (RICO), citing instances of wire fraud and financial institution fraud dating back to at least 2012.
The plaintiff seeks treble damages under RICO, as well as the return of his investment and additional compensation for financial losses.
The plaintiff is represented by attorney Wally Fayssoux. The case was filed in the United States District Court for the Eastern District of New York under Case No. 2:25-cv-05875.