BIZZIBIZ Franchise Founder Jim Piccolo Defrauded 105 Investors, Says AZ
(UnhappyFranchisee.com) BIZZIBIZ franchise founder Jim Piccolo announced that at the end of last year he was divesting himself of his previous businesses, including his controversial multilevel marketing scheme Nouveau Riche University.
Piccolo claimed he wanted to devote all his time and energy to the Bizzibiz digital marketing franchise venture, which he then launched January 2, 2011.
Not all of his previous business dealings could be so neatly left behind.
Allegations that Piccolo’s Nouveau Riche University was a scam are numerous and widespread in blogs and forums across the Internet.
And in February, 2011, just a month after the launch of Bizzibiz, his real estate investment seminar business came back to haunt him in a big way.
BIZZIBIZ Founder James Piccolo Must Pay Nearly $6 Million for Defrauding Investors
In a February 17, 2011 press release, the Arizona Corporations Commission announced that Jim Piccolo and his business partners must pay nearly $6 Million in restitution and fines for defrauding 105 investors with unregistered deed of trust investments. In part, the press release reads:
In the first case, the Commission ordered James Piccolo of Scottsdale, Craig Cottrell of Tempe
and Michael Roberts of Scottsdale and their affiliated companies to pay $5,577,226 in restitution and a
total of $300,000 in administrative penalties for defrauding 105 investors with unregistered deed of trust
investments.
The Commission found that the men promoted the unregistered deed of trust investments at
real estate education seminars where they convinced students to become investors, promising them
double-digit returns. The Commission found that Piccolo, Cottrell and Roberts misrepresented that a
second deed of trust or lien on vacant lots would be secured for the investors and that the investment had a
corporate guarantee behind it. Additionally, the Commission found that the respondents failed to record
any liens for the benefit of the investors.
The Commission found that Piccolo and Five Star Capital Markets, LLC solicited potential
investors to buy the unregistered deed of trust investment while not being registered to offer or sell
securities in Arizona. The Commission found that, during part of the time he was a registered securities
salesman, Cottrell fraudulently offered and sold the unregistered deed of trust investments without the
authorization of his securities dealer. As a result, the Commission revoked his securities salesman
registration. The Commission found that Roberts and his home development company, Charlevoix
Homes, LLC, received investor funds solicited by Five Star Capital Markets, LLC, Piccolo and Cottrell,
but Roberts and his company were not registered to offer or sell securities in Arizona.
In settling this case, Piccolo, Cottrell and Roberts neither admitted nor denied the Commission’s findings, but agreed to
the entry of the consent orders.
The full impact that Jim Piccolo’s sanctions will have on the fledgling Bizzibiz franchise program are not yet clear.
It appears that references to Jim Piccolo may have been removed from the “Team” page of the Bizzibiz website, but elsewhere Piccolo’s name has been inextricably linked with the Bizzibiz franchise.
In April, Bizzibiz Franchising Inc. filed a lawsuit against its franchise attorney, Director of Franchising & Board Member Kevin B. Murphy for legal malpractice (READ: BIZZIBIZ Suing Mr. Franchise Kevin B Murphy and Franchise Foundations PC ).
The question remains: Will the new digital marketing franchise survive its founder’s controversial past, or has Bizzibiz lost its sting?
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