October 8, 2020
On September 23, 2020, The U.S. District Court for the Southern District of New York in Manhattan filed three counts of fraud against Craig Zabala, a former registered representative and CEO, chairman, and president of Concorde Group Holdings in Jersey City, New Jersey.
Zabala was formerly associated with John W. Loofbourrow Associates, Inc. in Harlem, New York from February 2015 to April 2019 as a General Securities Representative. In May 2019, FINRA Department of Enforcement began investigating Zabala’s outside business activities and potential participation in private securities transactions while at the firm. Zabala refused to cooperate with the investigation and consented to a bar from associating with any FINRA member firm in all capacities in a Letter of Acceptance, Waiver and Consent, without admitting or denying allegations made against him.
The Securities and Exchange Commission (SEC) brought forth a Complaint against Zabala in August 2019. The Complaint alleges that Zabala made material misrepresentations to investors in Concorde Group Holdings Inc., raising at least $4.38 million from 17 investors. This fraudulent offering was purportedly to develop Holdings into a merchant bank for mid-sized companies and to invest in affiliate companies. Instead, Zabala misappropriated at least 72% of investor proceeds ($3.17 million) for personal benefit or to make Ponzi-like payments to investors. The SEC Complaint named Doreen McCarthy, his girlfriend, as a relief defendant.
The U.S. Attorney’s Office charged Zabala with one count of securities fraud and one count wire fraud, which carry a maximum prison sentence of 20 years each, and one count conspiracy to commit securities fraud and wire fraud, which carries a maximum sentence of five years in prison. The charges and allegations were similar to those in the SEC Complaint. Zabala also faces up to $5 million in fines or twice the gross gain or loss from the misconduct.