States Attorney's Office District of Connecticut
|November 5, 2010||
INDICTMENT CHARGES THREE INDIVIDUALS WITH PARTICIPATING IN INVESTMENT FRAUD SCHEMES
David B. Fein, United States Attorney for the District of Connecticut, today announced that a federal grand jury sitting in New Haven has returned a 20-count indictment charging ROBERT RIVERNIDER, 45, of Wellington, Florida, ROBERT PONTE, 56, of Stonington, Connecticut, and LORETTA SENECA, 48, of Boynton Beach, Florida, with various offenses stemming from two separate investment fraud schemes.
The indictment was returned yesterday, November 4. Today, RIVERNIDER was arrested in Florida and PONTE was arrested in Connecticut. RIVERNIDER is detained pending a detention hearing scheduled for November 12 in the Southern District of Florida. PONTE appeared before U.S. Magistrate Judge Joan G. Margolis in New Haven and has been ordered detained. SENECA is scheduled to be arraigned on Monday, November 8, in New Haven.
According to the indictment, between approximately June 2005 and April 2008, RIVERNIDER and PONTE conspired to defraud several victim investors by misrepresenting that the investors’ monies would be invested in legitimate, high-return investments. As part of the conspiracy, RIVERNIDER and PONTE used the Internet and other means to market a debt payment program typically called “No More Bills” through The Hudson Group, an entity that PONTE established. With the “No More Bills” program, RIVERNIDER and PONTE sought victim investors to invest monies with them, funds that typically the victim investors would raise through home equity lines of credit, or would borrow from 401K plans.
The indictment alleges that RIVERNIDER and PONTE materially misrepresented that investors would receive a substantial investment return, typically a monthly repayment on the invested monies of approximately seven to ten percent of their initial investment; that the returns would continue for a period substantially longer than needed to recoup the initial investment and result in a return substantially greater than the initial investment; that the victim investors’ existing debts and home equity lines of credit, if taken out to fund the investment, would be repaid in full from investment returns, and that the victim investors’ monies were being invested offshore in legitimate high-return investments, including investments in foreign currency exchanges, hedge funds, or other high-yield ventures. Instead of investing the funds as promised, the indictment alleges that invested funds were used to pay, among other things, the preexisting debts of other investors, and the living expenses of the extended family of RIVERNIDER and PONTE.
Through this first scheme, it is alleged that more than 10 investors lost at least $1.5 million.
The indictment further alleges that, between approximately November 2006 and December 2007, RIVERNIDER, PONTE, and SENECA engaged in a real estate investment scheme that defrauded both lenders and individuals they recruited. As part of the scheme RIVERNIDER, PONTE, and others recruited victim borrowers to take out financing to purchase various investment properties, primarily in Tennessee and Florida, with financing from victim lenders. RIVERNIDER and PONTE typically represented to borrowers that these properties would be passive investments and that PONTE and RIVERNIDER would be responsible for the details of the purchase, rental, maintenance and payment of the mortgages on the properties. The alleged co-conspirators made false representations to the victim borrowers that RIVERNIDER and PONTE would arrange for the purchase of the properties by the borrowers at markedly discounted values. In fact, RIVERNIDER and PONTE frequently marked up the purchase price of the properties to the victim borrowers, often by as much as 25 percent, without disclosing the increase in the purchase price. RIVERNIDER, PONTE and others also falsely represented that the investment properties would return to the victim borrowers sufficient monies to cover the carrying costs, as well as reduce the borrowers’ other debt burden.
The indictment further alleges that RIVERNIDER, PONTE, SENECA and others victimized lenders by making multiple false representaions in loan applications and other documents provided to the victim lenders. It is alleged that SENECA, a trained mortgage broker, was actively involved in the real estate transactions put together with RIVERNIDER and PONTE, including organizing and gathering many of the materials needed by the victim lenders, gathering certain information from the victim borrowers, providing certain comparables based on properties brokered by RIVERNIDER to be used for purportedly independent appraisals, and a range of other background tasks necessary for the lenders to make the loans.
This scheme is alleged to have involved at least 100 properties, and the victim lending institutions are alleged to have lost between $3 million and $10 million.
As to the first investment fraud scheme, RIVERNIDER and PONTE are each charged with one count of conspiracy and seven counts of wire fraud. These charges carry a maximum term of imprisonment of 20 years on each count. As to the real estate investment scheme, RIVERNIDER, PONTE and SENECA are each charged with one count of conspiracy and nine counts of wire fraud. These charges carry a maximum term of imprisonment of 30 years on each count.
The indictment also charges PONTE with two counts of tax evasion, a charge that carries a maximum term of imprisonment of five years.
U.S. Attorney Fein stressed that an indictment is not evidence of guilt. Charges are only allegations, and each defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being investigated by the Federal Bureau of Investigation and the Internal Revenue Service – Criminal Investigation. The case is being prosecuted by Assistant United States Attorneys John H. Durham and Christopher W. Schmeisser.
U.S. Attorney Fein noted that this prosecution falls under the umbrella of the President’s Financial Fraud Enforcement Task Force, which includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The Task Force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit: www.StopFraud.gov.
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