Press Release

NEWARK - The New Jersey Division of Consumer Affairs and the Bureau of Securities announced that the perpetrators behind a purported hedge fund based in Jersey City that operated a massive securities fraud scheme — including defendants Peter Zuck, 63, of Middletown, Michael J. Spak, 45, of Chesterfield, Joseph C. Spak, 71, of Milltown and John R. Najarian, 36, of Hillsdale, as well as others — have been held responsible for more than $55million in investor restitution, civil penalties and disgorgement as a result of a lawsuit filed by the Bureau of Securities, represented by the Division of Law.

"Investors lost millions in this scheme and our focus is on taking appropriate action against those responsible," Acting Attorney General John J. Hoffman said.  "This includes barring the most culpable of these scammers from the securities industry to prevent them from preying upon investors in the future."

As set forth in the original complaint, filed in State Superior Court in Jersey City in August 2012, defendants Peter Zuck, Michael J. Spak, Joseph C. Spak, and John R. Najarian, along with the Osiris Fund and Osiris Partners LLC (the "defendants"), fraudulently sold millions of dollars in securities issued by the Osiris Fund Limited Partnership, which they described as a "hedge fund" for the "little guys" and "moms and pops."  In offering and selling these securities, these defendants failed to disclose Zuck's numerous prior convictions involving theft and fraud, including a securities fraud conviction for, in a Judge's words, "bilk[ing] unsuspecting people out of a substantial amount of money [with] no remorse."  These defendants also sold unregistered securities and defrauded investors by making false investor account statements, failing to disclose their use of investors' funds for the benefit of certain individual defendants and their family members, overstating the hedge fund's net asset value to produce higher management fees and conceal losses, and improperly using unregistered agents to sell limited partnership interests in a hedge fund.  In total, approximately 76 investors were victimized by these defendants.

The Court has granted a motion for summary judgment and final judgment by default and ordered the following relief:

• Osiris Fund Limited Partnership; Osiris Partners, LLC; Michael J. Spak; Joseph C. Spak; and Brian J. Spak, 38, of Hamilton Square, are jointly and individually liable for $7.6 million in disgorgement and investor restitution, plus $47 million in civil penalties.

• Wayne G. Player, 52, of Tequesta, Florida, was ordered to pay $350,000 in restitution, $750,000 in civil penalties, and $69,229 jointly and individually with his company, Wayne Player Productions, LLC.  Wayne Player Productions, LLC was not found to have committed fraud.

• Loretta Spak, 48, of Chesterfield; ANS Enterprises, LLC; and Bryan J. Zuck, 31, of Jersey City, while not found to have committed fraud, are ordered to disgorge approximately $453,138 in ill-gotten gains.

"The Bureau of Securities is the front line of defense for New Jersey's investors against fraud like that committed by this purported Jersey City hedge fund," said Acting Consumer Affairs Director Steve Lee.  

"While marketing a hedge fund for 'the little guys,' these defendants inflated their management fees by basing them on fictitious, non-existent assets," Bureau of Securities Chief Laura H. Posner said.  "Investors should be on high alert when presented with complex investment vehicles, like this purported hedge fund, and investments with unusually high management fees."

In addition to the above final judgments, various settlements were reached between the Bureau of Securities and certain defendants which require them to pay restitution, civil penalties, and/or the disgorgement of ill-gotten gains:

• Peter Zuck; John R. Najarian; Jessica Najarian, 31, of Hillsdale; and IGF Consulting, LLC, through consent orders, requiring these defendants to pay disgorgement and/or restitution, plus $160,000 in civil penalties.  Jessica Najarian and IGF Consulting, LLC were not found to have committed fraud.

• Laurie Mazza, 54, of Middletown; Peter L. Zuck, 23, of Middletown; Nicole Zuck, 25, of College Station, Texas, Victoria Brialmont, 64, of Palm Beach Gardens, Florida; Jay John Soojian, 56, of Wayne; Dexter Group, LLC; and John Scheirer, 48, of Glenn Mills, Pennsylvania; through consent orders which require these defendants to pay disgorgement and/or restitution, plus $65,000 in civil penalties.  Laurie Mazza, Peter L. Zuck, Nicole Zuck, Victoria Brialmont, and Dexter Group, LLC, were not found to have committed fraud.

Deputy Attorneys General Emanuel S. Asmar and Paul E. Minnefor of the Division of Law represented the Bureau of Securities in this matter.

Rudolph Bassman, Chief of Enforcement, and Investigators Peter C. Cole and Richard Stewart of the Bureau of Securities conducted the investigation.

The Bureau of Securities can be contacted toll-free within New Jersey at 1-866-I-INVEST (1-866-446-8378) or from outside New Jersey at 973-504-3600.  The Bureau's website is located at NJSecurities.gov .

Follow the Division of Consumer Affairs on Facebook , and check our online calendar of upcoming Consumer Outreach events.

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