Feds: CT man gets 7 years in prison for $1.5M investment fraud
A 43-year-old Waterbury man who defrauded about 15 investor victims of about $1.5 million has been sentenced to more than seven years in prison, federal prosecutors said.
Leon Vaccarelli was sentenced Friday by U.S. District Judge Janet Bond Arterton in New Haven to 90 months of imprisonment, followed by three years of supervised release, prosecutors said.
A statement from U.S. Attorney for Connecticut John H. Durham said Vaccarelli was a registered representative of The Investment Center, a brokerage company, and was an investment adviser associated with IC Advisory Services Inc. He conducted business through an entity named Lux Financial Services.
“Using these various entities, Vaccarelli operated a financial advisory and brokerage service through which he offered investment advice and sold investments and securities to individuals and families in the Waterbury area,” the statement said.
“Between approximately 2011 and 2017, Vaccarelli defrauded approximately 15 victim investors of approximately $1.5 million by falsely representing that he would invest his clients’ money in IRA rollover accounts, money market accounts, certificates of deposit, or other types of interest-earning investments.
“However, instead of investing customers’ funds as he had represented, Vaccarelli deposited customer funds into his own personal account and business bank accounts, commingled those funds with his own money, and used the funds to pay both business and personal expenses, including tuition and mortgage payments.
“In some instances, he also used customer funds to make bogus ‘interest payments’ to other victim-investors.”
Federal prosecutors said the victims included an elderly woman who Vaccarelli coerced into transferring $300,000 from a safe investment portfolio into a bank account that he controlled. He subsequently spent the money on personal expenses and to pay off another investor who threatened to sue him, prosecutors said.
“Vaccarelli also stole nearly $500,000 from a trust, which was established in 1991 to care for a woman with diminished capacity. Other victims include a retired schoolteacher, a retired construction worker, and medical professionals,” the statement said.
Vaccarelli is required to pay full restitution, and Arterton will issue a restitution order after additional court proceedings.
On May 2, 2018, a grand jury returned an indictment charging Vaccarelli with three counts of mail fraud, six counts of wire fraud and three counts of money laundering. On March 5, 2019, a superseding indictment added three counts of wire fraud and six counts of securities fraud.
On May 29, 2019, a jury found Vaccarelli guilty of all counts.
Vaccarelli, who is free on $100,000 bond, is required to report to federal prison on Jan. 5.