"As part of his ticket resale business, Mr. Carton developed substantial relationships with senior staff members at Barclays Center,” his attorney Derrelle Janey wrote in a lengthy memo to the court. “Beginning in 2015, employees of Barclays Center began presenting Mr. Carton with opportunities to buy tickets to live events at Barclays Center and Nassau Coliseum for Mr. Carton to then resell on the secondary ticket market.”
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As a popular sports host, Carton was often in attendance at the Barclays Center for Nets and Islander home games, and he served on the venue’s advisory board. He also had a licensing agreement in place for the “Boomer and Carton Kitchen,” a concession stand selling items like the Boom Doggy Dog, the Batchagaloop Burger and Carton’s Kickin’ Chicken.
Carton said he also had a hush-hush deal with the building to buy and resale tickets for events through his firm Tier One Ticket, a state-licensed brokerage firm he ran with businessman and co-defendant Michael Wright. Carton’s attorneys claim he was also a professional gambler with financial backers that "invested large sums of money with him based on his gambling prowess.”
One of those financial backers, Carton claims, was Harvey Klein, a New York investor he met through Joe Meli. Last year Meli pled guilty to fraud, admitting to stealing nearly $95 million in a Ponzi scheme surrounding the sale of tickets. Carton says Meli convinced him he had an inside track to buy tickets directly from concert promoter AEG -- a deal he later admitted was a fabrication -- and together, the men struck a deal with hedge fund Brigade Capital Management to raise $10 million on a joint venture between Carton and Meli.
Carton claims that his portion of the agreement equaled $4.6 million and "over the course of Mr. Carton's business relationship with Brigade, thousands of tickets were purchased and sold.” Less than two months after the agreement was reached, Meli was arrested and charged with defrauding investors. After the arrest was made public, a meeting was called between Carton and officials with both Brigade Capital and Barclays Center, saying hedge fund employees wanted "to confirm that Mr. Meli was not involved in the agreement between Barclays Center and Mr. Carton."
"Notably, after investigating the circumstances of Mr. Meli's arrest, Brigade continued its business relationship with Mr. Carton,” his lawyers claim. "Over the next few months, Mr. Carton continued to sell hundreds of tickets through opportunities provided by Barclays Center."
Despite the continued relationship, Carton’s lawyers say that Meli’s arrest ultimately forced Carton into bankruptcy because Carton had made large investments in ticket allocation with Meli that turned out to be fake. That forced Carton to default on the loan with Brigade, although he claims he did reach a forbearance agreement with the fund and repaid "any monies allegedly lost."
In September, Carton was arrested and charged with conspiring with Wright to defraud investors. While prosecutors argue that Carton misappropriated the money to repay gambling debts, Carton argues that he had operated a legitimate ticketing business and is seeking documents from Barclays Center to "demonstrate the existence of a legitimate business relationship, and Mr. Carton's purchase of premium tickets to live events worth hundreds of thousands of dollars," according to his attorney.
"Barclays Center alleges it did not have any agreement with Mr. Carton for the sale of tickets to live events," Janey explains. "These internal communications will demonstrate the discussions employees of Barclays Center had regarding the sale of tickets to Mr. Carton and their understanding of the business relationship with Mr. Carton."
Carton’s attorneys are also requesting the due diligence reports Brigade conducted before entering into a loan agreement with Carton, as well as records of conversations between the government and potential witnesses in the case. U.S. District court judge Colleen McMahon will rule on the subpoenas later this month, telling both sides "At first blush, some of the requests appear to me to be improperly over broad,” while “some seem plainly irrelevant. A few strike me as entirely justified and perfectly proper, but based on a very preliminary assessment of the requests, there would be no great burden on the defense if these documents were produced at the outset of trial, rather than next week."