A Rochester man admitted guilt for his role in a Ponzi scheme that bilked investors out of more than $100 million, the United States Attorney’s Office announced Wednesday.
John Piccarreto Jr., 38, pleaded guilty to conspiracy to commit mail fraud and filing a false tax return. According to the federal filing, the men used the money to fund a “jet-setting lifestyle.”
Between 2017 and June 2018, prosecutors said, Piccarreto and co-defendants Perry Santillo, Christopher Parris, and others tricked unwitting investors across the country.
They persuaded them to withdraw their savings from traditional investments and turn over their money with promises the funds would be used to operate businesses such as financial services, insurance, real estate development and medical laboratories, according to civil court documents filed by the U.S. Securities and Exchange Commission.
Court documents allege those businesses either did not exist or barely existed, and that instead of actually investing the money, the men transferred the funds through multiple accounts they controlled, commingled the funds and then transferred the money elsewhere.
“These issuers had little to no substantial bona fide business activities, and other than monies obtained from defrauded investors, the issuers had no material revenue streams,” prosecutors said in a release.
The fraudsters allegedly used a business called Lucian Development and sold “fraudulent promissory notes that were issued under the names of various entities that Santillo and Parris controlled,” prosecutors said. Massive Ponzi scheme topping $100M described as ‘classic predatory stuff’SEC: Local investors among hundreds defrauded in alleged Ponzi scheme’King Perry’ Santillo admits to scamming hundreds in multimillion-dollar Ponzi scheme
Santillo, Piccarreto, and Parris worked for Lucian Global, a wealth management firm based in the same West Main Street building in Rochester that also headquartered several of the companies embroiled in the scandal.
They used the proceeds to finance luxurious lifestyles, prosecutors allege. Santillo has already pleaded guilty and is awaiting sentencing. Charges are still pending against the other co-defendants.
Piccarreto started working for Lucian in March 2012 and reportedly didn’t understand that business was a fraud. He aided in the completion of paperwork for clients, including checks and wire transfers. As he gained experience and proper licensing, his responsibilities grew. He began meeting with existing investors. Prosecutors said he didn’t realize the company was a Ponzi scheme until January 2017.
“However, rather than severing his association with Lucian Development, Piccarreto continued to work for Santillo and Parris, knowingly lying to investors by falsely reassuring them that their investments were safe and secure, even though he knew this was not true, and encouraging investors to ‘reinvest’ their fraudulent investments by signing new promissory notes,” prosecutors said.
During one May 2018 meeting, Piccarreto met with one client who had already invested $93,199.75. Piccarreto told the client his money was safe in another account and tried to get the person to reinvest the money and interest in another fraudulent promissory note. In another instance, Piccarreto knew a man and his wife had already invested $660,250 in the scheme, “but continued to lull the couple by falsely reassuring them that their investments were safe, and they would be fully repaid.”Your stories live here.Fuel your hometown passion and plug into the stories that define it.
One court filing alleged a New Mexico couple met Piccarreto and Parris in 2014 through a seminar the men led titled “How to Maximize your Social Security.”
Piccarreto admitted that between January 2017 and June 18, 2018, he was involved in defrauding 400 investors out of $18 million. That led to financial hardships for more than 25 of the victims. He also admitted to personally bilking eight people out of nearly $600,000 while he worked in Texas.
On his 2017 tax return, Piccarreto claimed $6,576 in earnings, but his total taxable income was actually $538,548. He avoided paying $159,423 in taxes, prosecutors said.
Piccarreto is scheduled to be sentenced at 3 p.m. July 29 by Chief U.S. District Judge Frank P. Geraci Jr.