Sports radio personality Craig Carton was arrested Wednesday on fraud charges alleging he and others used a Ponzi scheme and a concert ticket-selling scam for acts including Katy Perry to try to raise millions of dollars to pay off gambling debts.
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Conspiracy, securities and wire fraud charges were unsealed in Manhattan federal court against the host of WFAN's "Boomer and Carton" show. A related Securities and Exchange Commission case accused Carton of soliciting investments in ticket reselling enterprises in 2016 after he accrued millions of dollars' worth of gambling-related debts to casinos and other third parties.
Carton has hosted the sports-themed radio program broadcast on WFAN since 2007 with former NFL quarterback Boomer Esiason. FBI agents arrested Carton at his Manhattan home at 3:45 a.m. Wednesday before he could leave for work at a show that starts at 6 a.m.
Esiason said he was shocked.
"I'm taken aback and surprised by it, just like I'm sure everyone else is," Esiason told WFAN listeners. "I thought he had called in sick this morning. But, unfortunately, my partner was arrested."
The SEC alleged Carton provided fabricated and forged documents to investors, claiming access to large quantities of face-value tickets to upcoming concerts by artists including Perry, Adele, Justin Bieber, Roger Waters, Metallica and Barbra Streisand.
"In reality, no such agreements with the concert promoter or venue existed, and the signatures for the concert promoter or venue were forged," the SEC said.
Federal prosecutors said Carton teamed up with Michael Wright, of Upper Saddle River, New Jersey, to carry out a fraud on investors by posing as power brokers in the concert ticket business.
Each man was released on $500,000 bond at a hearing. Their lawyers declined to speak afterward to reporters.
Manhattan Acting U.S. Attorney Joon H. Kim said in a release that Carton, 48, and Wright, 41, deceived investors, raising millions of dollars "through misrepresentation and outright lies." The SEC said Carton and others misappropriated at least $5.6 million from two investors.
Kim said the men falsely claimed to have contracts with two companies to buy blocks of concert tickets.
"Behind all the talk, the Wright and Carton show was just a sham, designed to fleece investors out of millions ultimately to be spent on payments to casinos and to pay off other personal debt," Kim said.
A criminal complaint described how an unidentified hedge fund executed a revolving loan agreement that would provide Carton with up to $10 million to buy tickets with the understanding that the hedge fund would share in profits. According to the complaint, Carton forwarded hundreds of thousands of dollars of the investment money to casinos.
Evidence includes emails between Carton, Wright and a third person identified in the complaint only as a co-conspirator in which the person expressed concerns about the "math" behind the transactions.
"My thought was if we could sell a bunch of (Band 1) tickets next two weeks we would have legit profit to use and the same time create amazing good will with (the hedge fund)," Carton wrote in response, according to the complaint.
The radio show also is simulcast on CBS Sports Network TV. CBS owns WFAN and says it is cooperating with authorities.