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UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934

Release No. 81875/ October 16, 2017

ADMINISTRATIVE PROCEEDING

File No. 3-18252

In the Matter of

JOSEPH VITALE, 

Respondent.

ORDER INSTITUTING ADMINISTRATIVE 

PROCEEDINGS PURSUANT TO SECTION 

15(b) OF THE SECURITIES EXCHANGE

ACT OF 1934 AND NOTICE OF HEARING 

I.

The Securities and Exchange Commission (“Commission”) deems it appropriate and in the 

public interest that public administrative proceedings be, and hereby are, instituted pursuant to 

Section 15(b) of the Securities Exchange Act of 1934 (“Exchange Act”) against Joseph Vitale

(“Respondent” or “Vitale”). 

II.

After an investigation, the Division of Enforcement alleges that:

A. RESPONDENT

1. Vitale, 32 years old, engaged in the business of effecting transactions in 

securities for the account of others by working as a broker soliciting investments in LottoNet 

Operating Corp. (“LottoNet”), a Delaware corporation with its principal place of business in 

Pompano Beach, Florida, from approximately 2015 to 2017. He is not currently registered with 

the Commission in any capacity. Prior to that time, from 2006 until 2009, Vitale was a Series 7 

and 63 licensed registered representative. He is currently incarcerated in Miami, Florida in 

connection with the conviction described in paragraph B. 
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B. RESPONDENT’S CRIMINAL CONVICTION

2. On March 27, 2017, a federal criminal complaint was filed against Vitale in 

a criminal action. On June 6, 2017, Vitale pleaded guilty to one count of mail fraud in violation of 

Title 18 United States Code, Section 1341 before the United States District Court for the Southern

District of Florida, in United States v. Joseph Vitale, Case No. 17-60102-CR-BLOOM. On August 

22, 2017, a judgment in the criminal case was entered against Vitale. The Court sentenced Vitale 

to a prison term of 57 months and ordered him to make restitution in an amount to be determined 

by the Court.

3. In connection with that plea, Vitale admitted that:

(a) From approximately 2015 to 2017, he worked as a broker soliciting 

investments in LottoNet; 

(b) He frequently used the alias of “Donovan Kelly” when speaking to potential 

investors in LottoNet;

(c) He sent out the LottoNet private placement memorandum to prospective 

investors, which explicitly stated that: “[n]o commissions or any other form of 

remuneration will be paid on sales made directly to the public by the 

company”;

(d) In or around December 2016, Vitale met with a Federal Bureau of 

Investigation cooperating witness (“CW”) regarding LottoNet and told the 

CW that he received 35% commissions on investor money raised. On a 

conference call with an undercover agent posing as a potential investor, Vitale 

instructed the CW to falsely represent that no commissions were paid to CW 

as a broker;

(e) At least one investor that Vitale solicited mailed a $250,000 check to 

LottoNet’s offices for an investment in LottoNet. Vitale did not tell the 

investor that he was receiving a 35% commission on the transaction and the 

investor would not have invested had he known of this commission;

(f) LottoNet made at least $700,000 in payments to Vitale or his companies; and

(g) Vitale was responsible for soliciting more than ten investors who made 

investments in LottoNet. 

III.

In view of the allegations made by the Division of Enforcement, the Commission deems it 

necessary and appropriate in the public interest that public administrative proceedings be instituted 

to determine:

A. Whether the allegations set forth in Section II hereof are true and, in connection 

therewith, to afford Respondent an opportunity to establish any defenses to such allegations; 

B. What, if any, remedial action is appropriate in the public interest against Respondent 

pursuant to Section 15(b) of the Exchange Act; and
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C. Whether, pursuant to Section 15(b) of the Exchange Act, it is appropriate and in 

the public interest to suspend or bar Respondent from participating in any offering of penny 

stock, including: acting as a promoter, finder, consultant, agent or other person who engages in 

activities with a broker, dealer or issuer for purposes of the issuance or trading in any penny 

stock; or inducing or attempting to induce the purchase or sale of any penny stock.

IV.

IT IS ORDERED that a public hearing for the purpose of taking evidence on the questions 

set forth in Section III hereof shall be convened at a time and place to be fixed, and before an 

Administrative Law Judge to be designated by further order as provided by Rule 110 of the 

Commission's Rules of Practice, 17 C.F.R. § 201.110.

IT IS FURTHER ORDERED that Respondent shall file an Answer to the allegations 

contained in this Order within twenty (20) days after service of this Order, as provided by Rule 220 

of the Commission's Rules of Practice, 17 C.F.R. § 201.220. 

If Respondent fails to file the directed answer, or fails to appear at a hearing after being duly 

notified, the Respondent may be deemed in default and the proceedings may be determined against 

him upon consideration of this Order, the allegations of which may be deemed to be true as 

provided by Rules 155(a), 220(f), 221(f) and 310 of the Commission's Rules of Practice, 17 C.F.R. 

§§ 201.155(a), 201.220(f), 201.221(f) and 201.310.

This Order shall be served forthwith upon Respondent as provided for in the Commission’s 

Rules of Practice. 

IT IS FURTHER ORDERED that, pursuant to Rule 360(a)(2) of the Commission’s Rules 

of Practice, 17 C.F.R. § 201.360(a)(2), the Administrative Law Judge shall issue an initial decision 

no later than 75 days from the occurrence of one of the following events: (A) The completion of 

post-hearing briefing in a proceeding where the hearing has been completed; (B) Where the 

hearing officer has determined that no hearing is necessary, upon completion of briefing on a 

motion pursuant to Rule 250 of the Commission’s Rules of Practice, 17 C.F.R. § 201.250; or (C) 

The determination by the hearing officer that a party is deemed to be in default under Rule 155 of 

the Commission’s Rules of Practice, 17 C.F.R. § 201.155 and no hearing is necessary. 

In the absence of an appropriate waiver, no officer or employee of the Commission engaged 

in the performance of investigative or prosecuting functions in this or any factually related 

proceeding will be permitted to participate or advise in the decision of this matter, except as witness 
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or counsel in proceedings held pursuant to notice. Since this proceeding is not “rule making” within 

the meaning of Section 551 of the Administrative Procedure Act, it is not deemed subject to the 

provisions of Section 553 delaying the effective date of any final Commission action.

For the Commission, by its Secretary, pursuant to delegated authority.

Brent J. Fields

Secretary