While some of the cash he raised went into a startup company that ultimately failed, he misappropriated large sums, using the money for airline and hotel bills, tavern expenses and medical costs.
He also used some of the cash to make personal loans to three friends totalling more than $US60,000, the New Jersey Department of Law and Public Safety alleged when it first announced the prosecution six months ago.
Late in October Serritella admitted a second-degree charge of securities fraud, which arose from a probe by the state's Bureau of Securities and the Division of Criminal Justice.
Last Friday, Superior Court Judge Patrick Roma, sitting in Bergen County, sent the 66-year-old Garfield man to state prison for nine years.
He ordered him to pay back the $US1.7 million defrauded from investors.
Serritella's scam centred on selling unregistered shares of stock in the horseshoe manufacturing company and misappropriating investor funds for personal use.
New Jersey Attorney General Anne Milgram said Serritella had defrauded about 300 investors of more than $US1.7 million by selling them the stock, talking up the venture by saying he had a prince from Dubai as a client.
The District Attorney said Serritella used more than $US350,000 in investor funds for personal expenses.
He spent some funds in an effort to launch the company, but the venture failed.
In July, Serritella was ordered to pay a $US20,000 penalty by the Bureau of Securities chief, Marc Minor.
Minor found that Serritella had violated New Jersey securities law, in that he sold unregistered securities as an unregistered agent.
"This defendant sold $US1.7 million in fraudulent and unregistered securities to trusting investors," Milgram noted at the time.
"He repaid their trust by stealing hundreds of thousands of dollars of their money and leaving them with worthless shares in a failed company."
Serritella was president, chief financial officer and chairman of International Surfacing Inc, based in Garfield.
Milgram said most of the investors were New Jersey residents.
However, the shares Serritella sold them were not registered with the Bureau of Securities as required by law, and Serritella was not registered as an agent permitted to sell securities in the state.
Serritella told investors they could get in on the ground floor by buying shares in the company, which he planned to take public.
Serritella, according to Milgram, deposited the investors' funds in several bank accounts that he controlled.
He misappropriated about $US354,720 for personal expenses, writing cheques to himself and making cash withdrawals at automatic teller machines. He paid credit-card bills, and made personal debit-card purchases using investor funds from the accounts.
Serrittella did use some funds to rent a building, for salaries, and payments to a company contracted to assist in manufacturing horseshoes, but the venture never got off the ground.
The director of the Division of Criminal Justice, Deborah Gramiccioni, said her department was focusing on complex white-collar crime such as that committed by Serritella.
"Investors need to protect themselves by remembering that an offer which seems too good to be true is often precisely that - untrue.
Bureau of Securities Chief Mark Minor said: "Investment fraud is on the rise in these difficult economic times and investments that promise 'guaranteed results' or offer unusually high profits should be carefully scrutinised before any investment is made."