YARMOUTH — The music might be coming to an end for the Music Room, a live entertainment venue whose principal owner, Brian Serpone, is being sued for $2.9 million.
Serpone is one of four defendants in an adversary proceeding filed on Sept. 22, 2023, in U.S. Bankruptcy Court in Boston. The proceeding is essentially a lawsuit against Serpone, claiming he transferred $2.9 million prior to declaring bankruptcy for Levee Breaks Investment Group, a company he founded in 2015.
Levee Breaks used investor money to buy Cape properties, remodel them, sell them or rent them at a profit. In October 2021 Serpone filed for Chapter 7 bankruptcy, just a week after the state Securities Division had filed a civil administrative complaint against Levee Breaks and Dennis Serpone, Brian’s uncle, for violations of state law and willful violation of a consent order they had entered into with the state in May 2020.
The bankruptcy court appointed attorney David Madoff as trustee of the estate. A forensic audit on Levee Breaks done in 2022 found that $2.9 million in transfers had been made to four bank accounts prior to the bankruptcy filing, according to the complaint.
Brian Serpone was also the holder and/or signatory of all four bank accounts, the complaint alleges.
The four defendants listed in the complaint are Brian Serpone, Richard Serpone, Serpone Innovations and Alpha Entertainment Group.
Brian and Richard Serpone were both managers of Levee Breaks Investment Group.
Brian Serpone is the principal owner of The Music Room. He is also the manager of Alpha Entertainment Group and Serpone Innovations LLC d/b/a The Music Room.
When asked Thursday via telephone if he had transferred $2.9 million prior to filing for bankruptcy, a Brian at The Music Room said, “Absolutely not,” and hung up.
Madoff’s September complaint seeks to reclaim money for the 77 creditors of Levee Breaks Investment Group. A total of $4.5 million in claims were filed, with secured claims and mortgages totaling $1.4 million. The rest were claims made by mainly small investors, some of whom lost their life savings in the investment scheme.
From the outset, investors clamored for information on what had happened to their money. In a January 2022 interview, Madoff told the Times that there had been suggestions by people as to where the money went.
“There was a lot of money invested and a lot of money not accounted for,” Madoff told the Times.
The forensic audit found that $288,634 was transferred into four Citizen Bank accounts within one year prior to the bankruptcy filing, according to the lawsuit.
A total of $2,930,374 had been transferred to those same four accounts during the four years leading up to the bankruptcy filing, according to court documents. Massachusetts allows creditors to look back four years to find evidence of any fraudulent conveyance.
The complaint lists four counts against the defendants, including preferential and fraudulent transfers.
The transfers were “made with the intent to hinder, delay or defraud the debtor’s creditors,” according to court documents.
Denise Coffey writes about business and tourism. Contact her at [email protected].
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