BUFFALO, N.Y. — An 82-year-old businessman was charged Thursday with running a Ponzi scheme that took in at least $17 million from a clientele gleaned largely through ads in Catholic newspapers.
Richard Piccoli of suburban Buffalo declined to comment after appearing in federal court on a criminal complaint charging him with mail fraud. He was ordered to return Tuesday for arraignment.
He could face up to 20 years in prison and a $250,000 fine if convicted.
The U.S. Securities and Exchange Commission, meanwhile, moved to freeze the assets of Piccoli and his 33-year-old company, Gen-See Capital Corp.
Investigators said Piccoli guaranteed annual returns of 7.1 to 8.3 percent on what he said were investments in discounted real estate mortgages. But rather than invest new clients' money, Piccoli used it to pay earlier investors _ while directing about $600,000 to himself and his children, according to court documents.
Authorities have yet to determine how much money might be missing, Assistant U.S. Attorney Gretchen Wylegala said.
The criminal complaint said Piccoli appeared to deliberately target clergy, cemetery funds and other church entities by limiting his advertising to Catholic publications.
A simultaneous civil complaint by the SEC seeks an emergency restraining order to halt "an ongoing affinity fraud," a term used when con artists target their own kind. A federal judge did not immediately rule on the request.
A postal inspector who posed as someone interested in investing for his elderly mother said Piccoli told him he had more than 50 priests as clients.
"We're loaded with church funds right now because even the diocese is only payin' 3 percent," Piccoli told Inspector Shelley Carosella, according to an affidavit.
Records show Piccoli took in more than $17 million from more than 250 investors since 2004, including $500,000 in November alone.
Wylegala said Piccoli began his business in 1975, but declined to comment on whether he is suspected of fraud before 2004.
Piccoli appeared to gain the trust of new investors by providing lists of references that included several priests, and with flyers that said his company had been "serving seniors and retirees since 1975," investigators said.
The stream of new investments allowed Piccoli to keep up with monthly investor payments, they said.
"However, it is clear that he owes more to his investors than can be repaid from the amounts currently deposited in his various bank accounts," Carosella's affidavit said. "If new investments cease, the scheme will quickly unravel."
A spokesman for the Diocese of Buffalo said Piccoli's company has advertised in its newspaper, Western New York Catholic, for several years.
"He always paid his bills. We never had any complaints from our readers," spokesman Kevin Keenan said. "It would appear that the paper was duped as well as investors."
Keenan said his office had no centralized database that would show whether Piccoli belonged to a parish within the diocese or was active in the church.