Loan Broker Charged in $5 Million Advance Fee Scheme Built on Loans That Never Came
Quick Take: Federal prosecutors on Long Island have charged Nicholas Del Franco, a purported loan broker, with seven counts of wire fraud, alleging he collected more than $5 million in upfront fees and "prepaid interest" from over a dozen borrowers for loans and credit lines that never materialized. These are charges, not a conviction, and Del Franco is presumed innocent.
The pitch was a $100 million line of credit.
According to the indictment, a borrower in New Hyde Park, New York, was told in late 2023 that a credit line that size was available through a bank insured by the Federal Deposit Insurance Corporation. Full access came with one condition: a $5 million escrow payment up front.
The borrower said they didn't have $5 million. Prosecutors say the broker had an answer for that too. He offered to lend the borrower the escrow money himself, in exchange for a large upfront payment described as prepaid interest and fees. The two sides signed a loan agreement, and the borrower wired $325,468 to a company account in California.
Neither the $5 million loan nor the $100 million credit line ever arrived, the indictment says.
Who is charged
The man behind that pitch, prosecutors say, is Nicholas Del Franco, 39, also known as "Nicholas Thomas." According to the Justice Department, he owns and operates Quattro Capital LLC and Ares 2811 Corporation, which it describes as purported financial services companies in New York and California. The release lists him as living in Point Pleasant, New Jersey.
The indictment was unsealed on November 4 in federal court in Central Islip, New York. Del Franco was arrested that morning and arraigned that afternoon before U.S. Magistrate Judge Anne Y. Shields. If convicted, he faces up to 20 years in prison on each of the seven wire fraud counts.
"As alleged, Del Franco engaged in years-long overlapping schemes designed to steal millions of dollars from borrowers who believed they were paying required fees and upfront interest to secure loans." Joseph Nocella, Jr., U.S. Attorney for the Eastern District of New York
Three pitches, one ask
Prosecutors describe three overlapping schemes beginning around November 2023. The story changed from one to the next. The request at the end did not: send money before the loan.
The bank line: a $100 million line of credit from an FDIC-insured institution, unlocked by a $5 million escrow payment.
The family office: a wealthy family's "family office" supposedly looking to make multimillion-dollar construction and infrastructure loans, if borrowers first paid a percentage of the loan as prepaid interest. One borrower promised a $10 million loan for a real estate project paid $1 million, according to the indictment, which puts losses in this version at more than $3.5 million.
The private investors: a group of wealthy private investors supposedly funding similar loans on the same terms. A borrower in Middle Village, New York, who was promised $4.32 million for business operations, sent about $300,000, prosecutors say.
The borrowers in the indictment, identified only by number, were in New York, South Carolina, Nevada, Colorado and Arizona. The Justice Department says the victims included businesses, real estate developers and individuals, and that over a dozen have been identified so far. In each scheme, the loans and credit lines never came, and Del Franco kept the money, according to the release.
The case by the numbers
Charges: seven counts of wire fraud
Alleged losses: more than $5 million, per prosecutors
Borrowers: over a dozen identified so far, per the Justice Department
Promised in the indictment: loans and credit lines from $4.32 million to $100 million
Time frame: about November 2023 to the present, per the Justice Department
Maximum penalty: up to 20 years in prison on each count
Prosecutors say it didn't stop after his first arrest
This is not the first time Del Franco has faced federal charges. In a letter asking the court to keep him in custody, prosecutors said he was indicted in the Central District of California in October 2025 over a separate advance fee scheme from 2020 to 2021, with about $2.79 million in alleged losses. That case is still pending, and those charges are also allegations.
He was arrested in New Jersey in December 2025 and released on a $100,000 unsecured bond, on the condition that he not break the law while on release, according to the letter.
Prosecutors say he kept going. The letter describes three more prospective borrowers in 2026, after his release, who were promised loans or investments of $4 million, $7.6 million and about $8 million, and were asked for $203,000, $532,000 and $259,000 in prepaid interest. The government says he took more than $900,000 while on release, that part of it went to a lawyer representing him in the California case and to a boat rental company in Naples, Florida, and that he pitched one of those borrowers a larger deal as recently as the week before his arrest.
Prosecutors also wrote that since their investigation began in 2024, no one Del Franco promised funding has received it. They estimated his sentencing guidelines range at 108 to 135 months if he is convicted.
These claims come from the government's argument for detention. The conduct after his release is not among the seven counts in the indictment, and we were not able to confirm whether the judge granted the request to detain him.
A familiar playbook, minus the Ponzi
If this sounds familiar, it should. Kris Roglieri of Prime Capital Ventures was sentenced in April to 97 months in federal prison after pleading guilty to conspiracy to commit wire fraud in a scheme built on upfront payments for commercial loans that never funded. Prime Capital called its deposit an "Interest Credit Account" payment, or ICA, and told borrowers it was refundable if no loan came through.
Based on what has been filed so far, there is one notable difference. In Prime Capital's case, the Justice Department said Roglieri used ICA payments from newer borrowers to partially fund loans to, and refund payments to, older borrowers. Recycling new money to keep earlier clients quiet is what gave Prime Capital its Ponzi-like character. Nothing in the Del Franco indictment or the detention letter describes earlier borrowers being paid with later borrowers' money. Prosecutors say the money came in, and the loans never went out.
The labels change from case to case. Prime Capital had the ICA. William Thomas Engle's scheme, which ended in a nine-year sentence, used "good faith deposits." Here it was escrow and prepaid interest. In every version, the borrower pays before a loan exists.
What brokers and borrowers should take from it
Interest is paid on money you have received. "Prepaid interest" on a loan that hasn't funded is an upfront fee with a different name. In a real closing, prepaid interest and fees show up in the closing documents and are usually collected when the loan funds, often out of the proceeds.
Watch for the loan that pays for the loan. When the answer to "I can't cover the escrow" is a second loan that also needs money up front, the deal is producing fees, not funding.
Make the capital source checkable. "An FDIC-insured bank" should come with the bank's name, which you can confirm on the FDIC's own BankFind tool before calling the bank on a number you find yourself. A "family office" or "private investors" with no names attached can't be checked, and that is often the point.
Search the courts before anyone sends money. Prosecutors say Del Franco was already under federal indictment in California, and out on bond, when the 2026 borrowers were asked to pay. A federal and state court records search on the person and every company name belongs in the vetting of any funding source.
For brokers, your client's trust is on the line. Clients often reach a funding source through a broker. Before referring anyone to a lender that wants money before funding, get the source's legal name, verify it independently, and get the refund terms in writing. The safer rule is simpler: don't send clients to funding sources that collect before they fund. Funder Intel's business lender directory is one place to start vetting a lender.
What happens next
The charges in the indictment are allegations, and Del Franco is presumed innocent unless and until proven guilty. Assistant U.S. Attorney Michael R. Maffei of the office's Long Island Division is prosecuting the case, which was investigated by the FBI's New York Field Office. The Justice Department is asking anyone who believes they were a victim to contact the FBI through the tip line listed in its release.
Funder Intel will follow the case as it moves through court.