Barred B-D owner back in hot water with SEC in alleged healthcare fraud

A former broker-dealer owner who was barred from the securities industry in the wake of the 2008 credit crisis is back in the crosshairs of regulators, with the Securities and Exchange Commission last week charging the former brokerage executive, Joshua Constantin, as being part of a scheme to fabricate millions in assets, forge documents and lie to investors in order to raise money for a healthcare company, according to the SEC’s complaint. 

Constantin, 46, was the owner of Windham Securities Inc., a Long Island-based broker-dealer that was expelled from the securities industry by the Financial Industry Regulatory Authority Inc. in 2009, the same year that Constantin was barred for not cooperating with Finra’s investigation into the firm, according to his BrokerCheck profile. The SEC alleged four years later that Constantin was part of a fraudulent investment scheme to misappropriate $1.2 million from seven clients. 

Now, the SEC is alleging that Constantin and Justin D. Smith repeatedly from 2017 to 2023 lied to raise money about their company, Healthcare Solutions. The SEC's complaint was filed last Tuesday in federal court in Brooklyn. Constantin then signed a consent order, moving to settle the matter. 

"These types of brokers and executives are the scourge of the industry," said Adam Gana, a plaintiff's attorney. "In this case, Constantin moved around early in his career to other broker-dealers that failed. They go from firm to firm that has been expelled. I call it cockroaching, when a broker goes from one bad firm to the next rapidly."  

According to the SEC’s complaint, in 2017, Constantin co-founded Healthcare Solutions with Smith and another unnamed person.  

From November 2017 to June 2020, Constantin was purportedly only a consultant to Healthcare Sollutions and held the title of corporate comptroller. In June 2020, after formally becoming an employee, he assumed the additional title of head of commercial real estate operations. 

In March 2023, Constantin became Healthcare Solutions’ interim CEO, interim CFO, and sole director after the departure of most other company personnel, according to the SEC. Throughout this period, Constantin played a leading role in soliciting Healthcare Solutions investors and the plan to take the company public through a reverse merger, the SEC alleged. He also carried out the scheme with Smith to fabricate a trust called the Landes Investment. 

As a result of the fraud, investors suffered significant financial losses, according to the SEC.

By late 2022, Healthcare Solutions’ business had largely collapsed.

"In April 2023, the company’s stock price plummeted to almost zero and never recovered, rendering investors’ shares effectively worthless," according to the SEC. "The company currently has no operations or material assets."

Meanwhile, Constantin and Smith "compensated themselves handsomely from Healthcare Solutions’ coffers, each pocketing, directly or through entities they controlled, at least hundreds of thousands of dollars," the SEC alleges.