Ponzi Scheme Paid For Couple’s Personal Expenses

Ponzi Scheme Paid For Couple’s Personal Expenses

A Ponzi scheme allowed a couple from West Roxbury to enjoy a Bahamas vacation as well as give the mistress of the husband an apartment, and paid for gambling losses worth hundreds of dollars.

The indictments charge Steven and Lori Palladino with loan-sharking, making false corporate book entries and larceny. The husband was set to be arraigned by the Suffolk Superior Court soon while his wife has her arraignment scheduled on April 4.

Viking Financial Group, Inc, the company of the couple, borrowed money from investors. Steven Palladino told investors that the funds will be used in financing loans with higher interest rates.

However, only a small amount of the money was used for the loans, according to the district attorney of Suffolk, Daniel Conley, and Edward Davis, Police Commissioner of Boston. The funds were reportedly used in financing the lifestyle of the couple involved in the Ponzi scheme.

Earlier investors were paid using funds that came from new investors. The new money was also used in making interest payments to investors each month. The corporate books supposedly contained fake loans to show that they were balanced. The prosecutors indicated that the recipients of the supposed loans did not apply for them.

The money of the investors was often transferred to the personal accounts of the couple involved in the Ponzi scheme, basing on transactions. These were used for the personal expenses of the couple indicted for the Ponzi scheme.

Steven Palladino supposedly used $350,000 of the funds of investors to comply with the probation condition for a 2007 conviction where he defrauded a relative.

The indictment also pointed out that the real loans given by the company had an interest that was beyond the state limit of 20 percent. One of the loans given by the company of the couple involved in a Ponzi scheme charged over 200 percent interest while two had an interest of over 60 percent.

Posted by James Fried on Tuesday March 19 2013, 4:24 PM EST. Ref: Boston Herald. Link. All trademarks acknowledged. Filed under Finance. Comments and Trackbacks closed. Follow responses: RSS 2.0