Tag: ponzi scheme

the staff of the Ridgewood blog

Middletown NJ,  An investment manager with an office in Middletown, New Jersey, has been convicted of running a Ponzi scheme, concealing losses, faking investment returns, and stealing more than $10 million in investor money, U.S Attorney Craig Carpenito announced today.

Vicent P. Falci, 59, of Middletown, was convicted of all four counts of a superseding indictment: three counts of wire fraud and one count of securities fraud. He was convicted Dec. 13, 2018, following a two-week trial before U.S. District Judge Anne E. Thompson in Trenton federal court. The jury deliberated for 90 minutes before returning the verdict.

According to the superseding indictment and evidence at trial:

Falci controlled a number of investment funds under the names “Saber Funds” and “Vicor Tax Receivables LLP.” The Saber Funds were a collection of investment funds that Falci created and operated, starting in the early 2000s. Many of his earliest victims were friends, family, and associates. Falci served as a fire chief in Middletown, and some victims were policemen, fireman, and retirement funds for first responders. The Saber Funds grew to have more than 200 investors from whom the defendant raised more than $10 million.

Falci falsely told investors that the Saber Funds were conservatively invested in tax liens – which generated high returns with little risk. In reality, Falci diverted investor money to himself, his family, and to other companies he controlled. Some of the diverted funds were used for riskier ventures, such as day trading and real estate. Falci concealed losses and his own theft from investors. Based on these misrepresentations, investors continued to entrust additional funds to Falci and left previous investments under his control.

In early 2012, Falci started the Vicor Fund, targeting wealthier investors with greater sophistication in financial affairs. The investors in the Vicor Fund included financial industry professionals, and Falci ultimately raised $20 million from these victims. He again falsely represented that he had experience and a track record of success investing in tax liens, and promised that he could produce high rates of return with little risk. In reality, the assets of the Vicor Fund were rapidly depleted by Falci’s theft. 

In order to support his own lifestyle and repay investors the gains he had promised, Falci stole more than $10 million from the Vicor Fund between 2012 and 2016. At the same time, he reported fake investment gains to his investors on monthly statements. Falci concealed his theft in several ways, including by diverting funds to a fake company that he created to steal from investors. He also forged emails and reports, and created fake assets for the fund.

Each charge of wire fraud carries a maximum potential penalty of 20 years in prison and a $250,000 fine. The charge of securities fraud carries a maximum potential penalty of 20 years in prison and a $5 million fine. Sentencing is scheduled for March 21, 2018.

U.S. Attorney Carpenito credited inspectors of U.S. Postal Inspection Service, under the direction of Inspector in Charge James V. Buthorn, with the investigation leading to today’s verdict. He also thanked the N.J. Bureau of Securities in the State Attorney General’s Office, under the direction of Attorney General Gurbir Grewal and Bureau Chief Christopher Gerrold, for its assistance in the investigation.

The government is represented by Assistant U.S. Attorneys Justin Herring, Chief of the Cybercrimes Unit, and Paul A. Murphy, Chief of the Economic Crimes Unit, of the U.S. Attorney’s Office Criminal Division in Newark.