Every few years, a case comes along that becomes the textbook example of how boiler-room fraud has evolved for the modern era. Max Infinity is that case for 2026.
In December, John Cangialosi, Peter Girgis, and Gene “Jerry” Sarabella — the three principals behind Max Infinity Management LLC and Elder Fund Management LLC — stood up in federal court in Brooklyn and pleaded guilty to all five counts of their indictment: conspiracy to commit securities fraud, conspiracy to commit wire fraud, securities fraud, investment adviser fraud, and money laundering conspiracy. They were scheduled to go to trial on January 12, 2026. They didn’t make it there.
The Pitch
Max Infinity operated as a boiler-room-style call center selling something that sounded irresistible in 2021 and 2022: shares in hot private companies before they went public. According to the U.S. Attorney’s Office for the Eastern District of New York, sales agents told investors Max Infinity was offering stakes in companies like Stripe, Chime, Instacart, and Flexport, sourced directly from the issuers themselves. They claimed the fund charged no upfront fees and would only make money when investors did, through a 20% cut of eventual IPO profits.
None of that was true.
The government alleges the fund secretly marked up shares by as much as 95% or more, and paid sales agents commissions — sometimes 15% of the investment — straight out of client capital, all while telling investors the opposite. Employees were instructed to claim the firm had a track record investing in companies like Palantir, Facebook, and Airbnb. Those companies had already gone public before Max Infinity even existed.
The Part That Should Bother Every Advisor
Cangialosi and Girgis weren’t unknowns to regulators. Both had spent two decades in the securities industry and both had prior FINRA suspensions and disciplinary histories. Rather than disclose that, prosecutors say they took deliberate steps to hide their roles at the firm and set up a fake website designed to make Max Infinity look SEC-registered when it never was.
And the victims weren’t sophisticated day traders chasing a hot tip. Court filings describe scripts built specifically to work on elderly investors — promises of “triple digit returns,” lines about shares being “dirt cheap,” claims that the firm spent “millions of dollars” on research before recommending anything. More than 550 investors across the country put in a combined $65 million. Investigators say the defendants funneled a meaningful chunk of that into luxury watches.
Why This Case Matters Beyond the Headline
I’ve spent most of my career on the sales and marketing side of this industry, and later built a business helping people navigate what comes after a federal investigation. Cases like this one are worth studying closely, for two reasons:
First, for investors. Pre-IPO access has become one of the most effective hooks in fraud right now, precisely because it’s real in legitimate contexts — plenty of funds do offer genuine pre-IPO exposure. That legitimacy is what fraudsters borrow. If a fund can’t explain, in plain terms, exactly how it acquires the shares it’s selling you, and can’t produce SEC registration you can independently verify, that’s not a red flag — that’s the whole story.
Second, for anyone facing a federal investigation. All three principals pleaded guilty to the full indictment rather than negotiating a plea agreement — what’s often called an open plea. That’s a significant, high-stakes decision, and it’s one I’ve seen play out from the inside. Sentencing decisions in the federal system turn on details most people never think about until they’re staring down a PSR: acceptance of responsibility, loss calculations, victim impact, cooperation history. The gap between defendants who understand that process early and those who don’t is often the gap between years.
What’s Next
Sentencing has not yet been publicly scheduled as of this writing, and I’ll follow up once a date is confirmed. Each defendant faces a statutory maximum of up to 60 years, though actual sentences under the federal guidelines will look very different from that number. Cases this size — with hundreds of victims, elder targeting, and a documented pattern of concealment — tend to draw serious attention from prosecutors at sentencing.
I’ll be tracking this one as it moves toward that hearing.
