Joe Passalaqua’s Guilty Plea in $500M Securities Fraud

Joe Passalaqua’s guilty plea came on March 3, 2026, when the 37-year-old former CEO of Prior2IPO admitted in federal court to conspiracy to commit securities fraud, securities fraud, and conspiracy to commit wire fraud in connection with a $528 million pre-IPO investment scheme. The three counts together carry a maximum of 45 years in prison. He has not yet been sentenced.¹

What Passalaqua Admitted To

The plea covers all three counts the government brought against him in a superseding indictment unsealed on February 13, 2025.² The case is before United States District Judge Kiyo A. Matsumoto in the Eastern District of New York, docketed as No. 23-CR-499 (KAM).¹

Passalaqua was not named as a defendant in the parallel SEC civil action filed in December 2023.³ His exposure is on the criminal side.

The Scheme Behind the Charges

Between March 2019 and July 2022, Passalaqua and his co-defendants ran a network of sales offices under the Prior2IPO and Pre IPO Marketing names in New Jersey, New York, and Florida. They solicited investors to buy shares in private companies that were expected to go public, pitching the arrangement as fee-free: the firm, investors were told, would earn only a 20% cut of profits after an IPO or sale.⁴

That was false. Prosecutors and the SEC say the operation charged undisclosed markups on every investment, ranging from 10% to as much as 150% above what the underlying fund had actually paid for the shares. Those markups were funneled back to Passalaqua, his co-conspirators, and a network of unregistered sales agents. The offices raised roughly $528 million from more than 4,000 investors in the United States and abroad, and about $88 million of that was diverted through the hidden markups.¹

Sales agents were instructed never to disclose internal pricing sheets showing the gap between what the fund paid and what investors paid. When investors asked about fees, agents told them the two prices were the same. Private Placement Memoranda and side letters sent to investors stated in writing that there were no upfront fees.⁵

Passalaqua’s Role at Prior2IPO

Passalaqua, a Sparta, New Jersey resident, held the CEO title at Prior2IPO, which was incorporated in New Jersey in February 2017.⁵ He ran the operation alongside Raymond John Pirrello Jr., also of Sparta, who had been permanently barred by the SEC in September 2019 from associating with any broker, dealer, or investment adviser after a jury found him liable for insider trading.⁶

Because of that bar, Pirrello kept his full name off company documents and investor communications, going by “Ray John” or “Our Founder Raymond John.”³ Pirrello directed sales strategy; Passalaqua held the formal leadership role.⁷

Co-Defendants and Where Their Cases Stand

Three other defendants have resolved the criminal charges against them. Pirrello pleaded guilty on the same day as Passalaqua, March 3, 2026, to all three counts and faces the same 45-year maximum.¹ Robert Cassino pleaded guilty to wire fraud conspiracy on February 18, 2026 and faces up to 20 years.⁸ Joseph Rivera entered a guilty plea earlier in the case.

On the regulatory track, the SEC’s civil action names Pirrello, Marcello Follano, Cassino, Anthony DiTucci, Rivera, and four corporate entities, and seeks disgorgement, civil penalties, and officer and director bars.⁹ None of the corporate entities involved were ever registered with the SEC.⁵

What Happens Next

As of mid-2026, Passalaqua, Pirrello, and Cassino are awaiting sentencing before Judge Matsumoto. Local reporting indicates a hearing to address restitution and the government’s forfeiture of property derived from the scheme has been scheduled for September 2026.⁷ The actual prison term Passalaqua receives will be set at sentencing and may fall well below the 45-year statutory maximum.

Investors who believe they were victimized by Prior2IPO or Pre IPO Marketing can reach the FBI through a dedicated contact page established for the case.⁴

1
U.S. Department of Justice. Three Sales Executives Plead Guilty in $500 Million Investment Fraud Scheme
2
U.S. Department of Justice. Three Sales Executives Charged in Connection With Pre-IPO Fraud Scheme
3
U.S. Securities and Exchange Commission. SEC Litigation Release LR-25907
4
U.S. Department of Justice. Founder and Executive of Prior2IPO Indicted in Investment Fraud
5
U.S. Securities and Exchange Commission. SEC Complaint, Case No. 23-cv-08953
6
FINRA. Raymond John Pirrello Jr. BrokerCheck Report
7
TAPinto. Sparta’s Joseph Passalaqua and Raymond Pirrello Plead Guilty in Federal Court
8
Investment Executive. Trio Pleads Guilty in US$500 Million Scheme
9
U.S. Securities and Exchange Commission. SEC Charges Five Individuals in Pre-IPO Fraud