Scalpers were quick to capitalize when resold tickets for the hit Broadway musical Hamilton began fetching up to $2,500 last year, with one criminally industrious group even establishing a gigantic Ponzi scheme based on how lucrative ticket-selling was.
They lured investors to contribute cash to a pool they said they’d use to buy hot concert and show tickets in bulk—promising money back plus 10%. And among those caught in the fray, Bloombergreported Monday, was a smattering of big names, including several billionaires.
Hedge fund manager Paul Tudor Jones, founder of the eponymous technology company Michael Dell, and an executive at Och-Ziff Capital Management Group were reportedly among the some 125 people lured into pouring money into the pool. The Securities and Exchange Commission estimates the scammers ended up collecting over $81 million.
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Three men—Joseph Meli, Steven Simmons, and Mark Varacchi—have been charged in relation to the scalping scam. Meli reportedly falsely told at least some investors that their ticket reselling plan had the backing of Hamilton‘s producer.
Nevertheless, its irregular for billionaires—accustomed to appraising investment pitches–to be lured into a Ponzi scheme. According to one securities lawyer Bloomberg spoke with, familiarity with the scammers could have helped secure their buy-in.
“When the promise of a quick buck is being made by someone you socialize with, it’s all the more tempting,” said Paul Ryan, a former SEC enforcement attorney.
He added, however, that “the idea that there were blocks of Hamilton tickets available for purchase should have been a giveaway.”