Casinos have access, similar to banks, to individuals' detailed credit reports... this means they know how much money an individual makes and how much credit they have access to... Despite this, they routinely ignore cases when individuals clearly are outspending their means... This usually means they are stealing from someone else...
Boston pair alleged to take millions in Ponzi scheme
By Evan Allen
| Globe Correspondent March 19, 2013
Josh Reynolds for The Boston Globe
In addition to his bail, Steven Palladino was ordered to wear a monitoring bracelet and surrender his passport.
‘The actual business of the company is essentially no business.’
Steven Palladino, who has more than two dozen theft-
related convictions on his record, faces a litany of charges related to the scheme after a Suffolk grand jury returned indictments last week. He pleaded not guilty Monday at his arraignment in Suffolk Superior Court.
Lori Palladino is to be arraigned next month on most of the same charges as her husband.
Clerk Magistrate Gary Wilson set Steven Palladino’s bail at $250,000 in cash, over the objections of Palladino’s lawyers, who described their client as a family man with deep ties to his community and a history of charitable donations.
Palladino, said his lawyer, Walter Prince, is “absolutely” 100 percent innocent.
“It’s well worth noting that there is no investor that is out a penny. Every investor has been paid,” said Prince after his client was taken into custody. Palladino “is entitled to the presumption of innocence, and I hope everyone respects that,” Prince said.
Prince described Lori Palladino as an “innocent spouse” who should not have been indicted.
But Goldberger, the prosecutor, painted a much different picture.
Steven Palladino, he said, has a criminal record riddled with larceny convictions. He was convicted in a 2006 case of defrauding his 94-year-old aunt of real estate and, according to court documents, was ordered to pay restitution and return her deed to her.
And Palladino did, said Goldberger — with $350,000 he made from his Ponzi scheme.
The charges Palladino pleaded not guilty to on Monday, said Goldberger, relate to four groups of people who invested more than $3 million, but the grand jury investigation remains open, and more charges and more victims are likely.
Prince declined to say how many investors his client had. A spokeswoman for the Suffolk district attorney’s office said that officials are not releasing a specific amount the Palladinos are accused of stealing, saying only that it was “multimillions.”
Palladino — whose company was incorporated in Massachusetts in 2007, according to court documents — found investors through friends and business partners, Goldberger said.
“It’s essentially word of mouth,” Goldberger said. “Word of mouth, and what Mr. Palladino represented to them.”
The prosecutor pointed to one letter presented to potential investors in which Palladino said that Viking was an “asset-based private lending company” backed by $25 million in assets, mostly real estate, and that many clients funded one project after another. He said the company had never seen a single loan default.
But Goldberger said that when investigators looked in the company books, dated through the end of 2011, they found nearly $2 million in fake loans and $756,840 in real loans, according to court documents.
From Sept. 1, 2009, through the end of 2012, Viking took in $4.6 million in new investments but made just $1.6 million in loans, according to prosecutors.
Of the money that was lent, at least $600,000 was for loans to Steven and Lori Palladino, according to court documents.
“The actual business of the company is essentially no business,” Goldberger said. “It is to take the money from their investors, to use it to make the monthly interest payments to old investors — payments that Mr. Palladino never missed — because that’s the essence of the Ponzi scheme, you have to keep paying people their monthly interest, and you can do whatever you want with the principal, which in this case was to gamble and to support a rather lavish lifestyle.”
When Viking made loans, Goldberger said, they were often made at such a high interest rate that they were illegal.
When Palladino found out about the indictment, he was on a trip to California. Police found his family’s passports on his kitchen table when a search warrant was executed last week, Goldberger said.
“It is the Commonwealth’s concern that he has come back here to liquidate as many assets as he can and then abandon Boston,” Goldberger said. “He is somebody who owes millions of dollars, who is going to have a number of very angry investors coming after him, and he is somebody who has the capability to flee this jurisdiction.”
Palladino was charged with four counts of larceny over $250, three counts of falsifying corporate books, one count of uttering and three counts of usury, or loan sharking. He is also charged as a common and notorious thief, which would lengthen his sentence if he is convicted.
Palladino’s lawyers maintained their client was not a flight risk.
In addition to the $250,000 cash bail, Wilson ordered Palladino to wear a monitoring bracelet, surrender his passport, and not to travel outside Massachusetts without the court’s permission.
Palladino is scheduled to be back in court May 15, according to the Suffolk district attorney’s office.
http://bostonglobe.com/metro/2013/03/18/west-roxbury-couple-charged-with-multi-million-dollar-ponzi-scheme/3hNV2UR0wicmsuO3YemvGN/story.html
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