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Middletown Investment Manager and Former Fire Chief Convicted of Running Ponzi Scheme to Steal More Than $10 Million

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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.

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Former Midland Park Man Arrested In Kansas On Charges Of Running $900,000 Ponzi Scheme

Charles_Ponzi

the staff of the Ridgewood blog

Midland Park NJ,  A former Bergen County, New Jersey, man was arrested today in Park City, Kansas, on charges that he defrauded at least 20 people by soliciting investments in what he claimed were highly successful financial instruments, but which was actually a Ponzi scheme, U.S. Attorney Craig Carpenito announced.

Thomas Lanzana, 51, formerly of Midland Park, New Jersey, and now residing in Pawleys Island, South Carolina, was charged by complaint with one count each of wire fraud and commodities fraud. He is scheduled to have his initial court appearance today in Wichita federal court.

According to the criminal complaint:

As early as 2013, Lanzana fraudulently solicited approximately $900,000 from at least 20 customers to invest in algorithm-based trading pools in foreign currency derivatives (forex) and other financial instruments. He falsely claimed to prospective customers that he was a successful forex trader. Lanzana allegedly took several steps to keep his customers’ trust: he sent them false account statements; he posted false monthly account statements to his companies’ websites showing balances, some in excess of $800,000, for forex trading accounts that did not exist; and he sent false tax documents to customers reporting earnings that did not exist.

Lanzana misappropriated at least $350,000 in customer funds, using some to repay earlier investors in the manner of a Ponzi scheme, and to pay for his personal expenses, including purchases on Amazon, payments to a luxury car dealer and a jewelry retailer, and golf expenses.

The count of mail fraud with which Lanzana is charged carries a maximum potential penalty of 20 years in prison and a fine of $250,000, or twice the gross gain or loss caused by the scheme. The count of commodities fraud carries a maximum potential penalty of 10 years in prison and a fine of $1 million, or twice the gross gain or loss.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie, and special agents of IRS-Criminal Investigation, under the direction of John R. Tafur, with the investigation leading to the arrest. He also thanked the U.S. Commodity Futures Trading Commission’s Division of Enforcement for its role in the investigation.

The government is represented by Assistant U.S. Attorney David W. Feder of the U.S. Attorney’s Office’s Cyber Crime Unit.

The charges and allegations in the complaint are merely accusations, and he is presumed innocent unless and until proven guilty.

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Social Security System Was Doomed From The Start

socialsecurity

April 4,2017
the staff of the Ridgewood blog

Ridgewood Nj, Author Says U.S. Government Misjudged The Future In 1935

Shortly after the Reagan Administration took charge in Washington D.C., professional investor and author of the book “Roadway to Prosperity” (www.roadwaytoprosperity.com) Al Jacobs essentially opted out of the Social Security System.

From that time on Jacobs has contributed only minimally to the system, while retaining a vested interest in both Social Security and accompanying Medicare benefits from the U.S. Government.

“Social Security provides necessary security for those who have worked until they are 65 and not accumulated enough savings to live on,” says Jacobs, “but for those who have accumulated the means to do without Social Security income, they’d be wise to extract themselves if they are able.”

Jacobs says there are many reasons that the U.S. Social Security System was in trouble from the start. Here’s a look at the Social Security System past, present and future:

The current Social Security System was part of President Franklin Roosevelt’s New Deal that came to fruition in 1935. The measure, meant to implement social insurance for the elderly and unemployed, was enacted as a result of the Great Depression of the 1930s, which wiped out the savings and income of many elderly and retirees.
Initial payments, limited to $30 per year, were made into the system only by employees. If the U.S. Government had a crystal ball, it might have foreseen the problems Social Security would cause. In 1940, life expectancy for all Americans was 63 years of age, thus the government didn’t expect to pay benefits to its citizens very long. Ida May Fuller was the first to receive a monthly Social Security check. She paid $24.75 into the system, lived to be 100-years-old and collected $22,882.92 during her retirement years.
Not all beneficiaries were as lucky as Ida May, but it was an ominous beginning for the system. Throughout the next 70-plus years, amendments were added, employers were forced to pay in and optimism that the system could roll on as it had always done continued well into the 1980s.
As one century faded into another, Americans began to live longer for many different reasons, and as they did, Social Security began to show signs that it couldn’t last. The system soon became a hot item on the political trail, even prompting Donald Trump to tell everyone he didn’t need the $2,663 a month. He even encouraged his fellow billionaires – and those less fortunate millionaires – to stop taking the payment. The message didn’t seem to resonate, however, as these groups of earners are collectively taking in more than $1.4 billion a year in Social Security benefits.
According to a Pew Research Study, since 2010 Social Security’s cash expenses have exceeded its cash receipts. By 2019 the US Treasury will start dipping into its reserves and according to the study, Social Security will pay out its final checks in 2034 if something doesn’t change.
Today the retirement age in the U.S. remains 65-years-old, while the average lifespan for citizens is 78 years.

About Al Jacobs

A professional investor for nearly five decades, Al Jacobs holds a degree in civil engineering from Rensselaer Polytechnic Institute, a Real Estate Certificate from the University of California and a Certified Property Manager designation (CPM) from the Institute of Real Estate Management. He organized his own investment firm in 1968 and has since specialized in development and management of real estate, and has a deep involvement in corporate securities. His written works can be found in the book “Roadway to Prosperity” and also in several newspapers near his hometown of Monarch Beach in Orange County, Calif. Jacobs writes a weekly column for his website (www.roadwaytoprosperity.com) as well.

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WARNING: U.S. Ponzi Retirement Market In Big Trouble As Withdrawals Now Exceed Contributions

Charles_Ponzi

Apr 1, 2017 9:17 PM
By the SRSrocco Report,

The U.S. Retirement Market is in BIG TROUBLE as annual benefits paid out are now larger than total contributions.  Actually, the amount of net withdrawals were the highest in history.  When payouts become larger than contributions… then we have the making of the typical PONZI SCHEME.

Americans who have invested their hard-earned money into a 401K, had no idea that it was the Greatest Ponzi Scheme in history.  Unfortunately, when the markets crack, so will the value of the U.S. Retirement market.  On the other hand, Americans who were wise enough to purchase physical precious metals will protect their wealth as the U.S. Paper Retirement Market collapses.

According to the most recent data by the ICI – Investment Company Institute, the U.S. Retirement Market ballooned to a new record high of $25.3 trillion at the end of 2016:

https://www.zerohedge.com/news/2017-04-01/warning-us-ponzi-retirement-market-big-trouble-withdrawals-now-exceed-contributions?utm_source=dlvr.it&utm_medium=facebook

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Reader says For New Jersey Pensions at the Current Cash Burn Rate, the Funds will be Insolvent in Less than a Decade

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The math doesn’t work. The net asset value of the Pension Fund assets managed by the NJ State Investment Division was $72.9bn as of June 30, 2016. 41% of the 785,000 members in seven public pension systems are retired versus 51% of the members who are still working and contributing to the pension plans, while 8% are vested members no longer accruing benefits but not yet retired. That 41% of 785,000 = 321,850 retirees being supported by only 400,350 members still contributing to the plan, i.e. 1.24 workers per retiree. You need over 2 workers for every retiree to have a solvent plan, so already this is a mess with too few employees contributing to a system with too many retirees. Those 321,850 retirees draw annual pensions on average worth $31,070 but this number will explode as baby boomers retire through 2024. For example, note twelve of the fifteen +$100,000 a year public pension retirees in the Village of Ridgewood as of 2015 were police & fire, with only three from the BoE. But we just had seven more policemen retire in 2016. Once the baby boomers all retire, there are potentially less workers than retirees in NJ, which is the definition of a PONZI scheme with $10bn a year paid to plan beneficiaries vs. plan assets $72.9bn.

NJ pension funds cut checks to retirees worth over $10bn last year versus pension plan assets of $72bn. The problem is the benefits are too generous. At the current cash burn rate, the funds will be insolvent in less than a decade, with liabilities far in excess of plan assets. Think about that: we pay out over $10 billion per year in public pension benefits to retired public sector workers. So even with assets of over $70 billion, the system is fragile. Public pension plan and health care benefits need to be diminished before taxes can be raised further as we are already the highest taxed residents of any state in the nation. Start by lowering the assumed annual rate of return to 7%, use the updated actuarial mortality data to add 2-3 years of life expectancy to the liability. Then start moving all new hires to defined contribution pension plans like 401(k) plans to prevent politicians and unions from meddling with employee pension assets. If the pension assets are in the hands of the employees and not the state and municipalities, they will be protected. Then convert all current employees from Platinum to Bronze level health coverage, which is the equivalent of what is offered in the private sector. Only then can taxes be raised for funds specifically earmarked to close the pension liability gap.

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Readers Agree there is No Hope for New Jersey Pensions

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NJ’s public sector pension plans are expected to be mostly insolvent by 2027 as the pension demands of retirees far outweigh the capital appreciation and new contributions to the fund. That’s what happens when you assume 7.95% annual pension fund returns (not adjusted for inflation) and 1980s era mortality data to pay for “special” retirements after 25 years of service. The fact is people are living longer than they were in the 1980s. So NJ has public sector retirees who will earn more from their pension (plus health plan benefit cost savings before Medicare kicks in) than they did in their 25 years of service. For example, the average PFRS retirement age is 52. If that retiree lives to 84,the recent expected average male lifespan in the US, then they’ll draw a pension for 32 years vs. only 25 years of service. This is nothing more than a Ponzi scheme where retirees are taking out much more than the <10% they actually contributed from wages could ever earn in the pension funds. Simply, the pension math no longer works.

There is no ‘fix’ possible. We are well past the point where a ‘fix’ could be implemented.

The optimal path now (something that Christie intentionally/unintentionally followed) is to hasten the demise of the unsustainable pension liabilities. Restructuring is inevitable, the sooner it is done the better it will be for all sides – pensioners as well as taxpayers.

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Reader says Menendez always seems willing to align his votes with the highest bidders

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file photo Ridgewood Reorg

Reader says Menendez always seems willing to align his votes with the highest bidders

I was in Ecuador last year and this issue came up again and again. The people of Ecuador lost billions while a small group with insider knowledge profited and found refuge in Florida. I am not surprised that Menendez is under investigation as he always seems willing to align his votes with the highest bidders.

Google Menendez and AIPAC campaign donations and you will see perhaps why Mr Menendez is leading efforts to sabotage talks with Iran.

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Menendez unaware of probe into his ties to former Ecuadorean bankers

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file photo by Boyd Loving at Ridgewood REORG

Menendez unaware of probe into his ties to former Ecuadorean bankers
Saturday January 25, 2014, 12:01 PM
BY  MICHAEL LINHORST AND HERB JACKSON
STAFF WRITERS
The Record

U.S. Sen. Bob Menendez said Friday that he is unaware of any federal investigation into his interactions with a pair of former Ecuadorean bankers living in the United States.

“I am not aware of any official inquiry in this matter,” he said, a day after NBC New York reported that the U.S. Justice Department was looking into the Democratic senator’s ties to the bankers.

The Record and Herald News were unable to confirm on Friday whether an investigation was under way.

The two former bankers, brothers named Roberto and William Isaias, have lived in Florida since 2000. They fled Ecuador after their bank, Filibanco, one of the country’s largest financial institutions, collapsed amid a banking crisis in the late 1990s.

Ecuadorean officials have sought extradition of the two men for more than a decade. The country accuses them of embezzling hundreds of millions of dollars of bailout money before fleeing to Florida. In 2008, Ecuador seized hundreds of assets belonging to the brothers, including several television stations. The Ecuadorean government said it was trying to recoup some of the money taken by the Isaiases, but critics contend that the move was an attempt to tighten government control over the South American country’s news media.

– See more at: https://www.northjersey.com/news/Menendez_unaware_of_probe_into_his_ties_to_former_Ecuadorean_bankers_.html#sthash.M0Pe1mQh.dpuf