When caught with a hand in the proverbial cookie jar, there are many different ways to react. For two of the three members of a claims aggregator nailed for stealing millions from class action settlements, the solution was simple - admit their guilt through a plea deal and accept their punishments.
The third, Joseph Cammarata, chose a different path and went to trial. When that didn't turn out well, he appealed his case to the 3rd Circuit Court of Appeals, hoping for a better outcome. Instead, Cammarata may face even stiffer restitution requirements as the three-judge panel ruled he'd gotten off too easily.
It's Not Like It's a Very Big Island
In 2014, Alpha Plus Recovery, LLC was formed by Joseph Cammarata, Eric Cohen, and David Punturieri. The company acted as a securities class action settlement claims aggressor. Under this business model, they would submit claims on behalf of clients in class action suits, taking a percentage of the award as their fee.
Between 2014 and 2021, Alpha Plus Recovery filed in over 400 securities class action settlements. The overwhelming number of filings were for three clients that turned out to be defunct foreign shell companies the defendants had acquired and incorporated in New Jersey.
Cammarata, Cohen, and Punturieri would falsify documents claiming that these firms traded in securities with companies named in class action suits. This was sometimes done through SpeedRoute, a broker dealer founded by Cammarata in 2010. While sold in 2015, Cammarata remained CEO until 2018.
The trio continued to make claims until 2021, receiving over $40 million from claims administrators. Cammarata spent $5 million of the fraudulently-derived income to buy a private island. The scheme unraveled in 2020 when a claims administrator required proof from Alpha Plus Recovery on claims for their shell companies. When unable to provide it, Cammarata offered a $1 million bribe to the financial crimes investigator hired by the claims administration firm.
Grand jury indictments soon followed in 2021 for mail fraud, wire fraud, money laundering, and conspiracy to commit money laundering. Punturieri and Cohen took a plea deal, agreeing to testify against Cammarata in exchange for some charges being dropped.
Cammarata went to trial with the novel defense that yes, he did indeed illegally file all those claims through shell companies. He argued that it was okay because he'd made the trades personally and just never gotten around to informing the claims administrators that this was something that he'd allegedly done.
The jury didn't buy it. Cammarata was convicted in 2023, sentenced to 120 months in prison, and ordered to make restitution that included forfeiting certain properties. He was also found guilty on tax evasion charges in 2023. His appeal to the Third Circuit was argued on September 19, 2024.
Not the Results He'd Been Hoping For
In his appeal, Cammarata argued that the government had overstepped its authority during the trial, the restitution amount was unjust, and certain seized properties were ineligible. The Third Circuit panel agreed with some of his claims, but not in the manner Cammarata wanted them to.
Judges L. Felipe Restrepo, Theodore McKee, and D. Brook Smith agreed that the ruling of how much restitution Cammarata was responsible was wrong and vacated the lower court's decision. Citing the Mandatory Victims Restitution Act of 1996, the panel agreed that the $31 million Cammarata had been ordered to repay didn't provide full restoration to the victims. It was sent back to the lower courts with instructions to reevaluate and likely raise the amount.
The panel ruled against Camamarata's procedural charges and determined that a property had been properly seized. Given how things turned out, this DoughBro may have been better off leaving well enough alone.
Related Resources
- How Do I Know if I'm Eligible for a Class Action Suit? (FindLaw's Law and Daily Life)
- Mandatory Victims Restitution Act Circuit Split Decided (FindLaw's Federal Courts)
- Class Action Cases (FindLaw's Litigation and Appeals)
