Co-owner of ameripay llc and sherbourne capital management sentenced to five years in prison for $10.2 million fraud on clients
FOR IMMEDIATE RELEASE
March 18, 2011
NEWARK, N.J. – Paul Bultmeyer was sentenced today to 60 months in prison for conspiring with his co-defendant Arthur Piacentini to defraud the clients of Ameripay LLC, a payroll services company located in Rochelle Park, N.J., U.S. Attorney Paul J. Fishman announced.
Bultmeyer, 70, of Upper Saddle River, N.J., previously pleaded guilty before U.S. District Judge Jose L. Linares to Count One of an Information charging him with conspiracy to commit wire fraud. Judge Linares also imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Bultmeyer admitted that from December 2004 through May 2009, he operated Ameripay LLC with Piacentini. Ameripay was a payroll company which handled payroll and tax withholding services for its clients, including numerous public and private entities located throughout New Jersey. In that capacity, Ameripay received money from the entities, and was responsible for issuing payments to the IRS and paying the employees of those entities on their behalf.
Ameripay amassed a shortfall in money due to inappropriate diversion of funds, and was unable to fulfill its obligations to its clients or make payments on time. Piacentini and Bultmeyer used millions of dollars sent by Ameripay clients to pay the payroll and tax obligations of other entities. By May 2009, the amount of money which had been inappropriately diverted totaled approximately $10.2 million.
Piacentini and Bultmeyer also owned purported investment company Sherbourne Capital Management, Ltd. and Sherbourne Financial, Ltd. (collectively, “Sherbourne”). They conspired to recruit additional clients to Sherbourne whose money was sent to Ameripay to be used to pay the obligations of others.
The Sherbourne clients were told that their money was being invested according to a diversified investment strategy and was protected. The investors were never told how their money was really being used, and in some cases, were even given money provided by other clients as “interest” on their investments.
In addition to the prison term, Judge Linares sentenced Bultmeyer to three years of supervised release and ordered him to pay restitution in the amount of $8,606,413.36.
Piacentini pleaded guilty to the conspiracy before Judge Linares on May 5, 2010, and awaits sentencing.
U.S. Attorney Fishman credited special agents with the FBI, under the direction of Special Agent in Charge Michael B. Ward, in Newark, with the investigation leading to today’s sentence. He also thanked the U.S. Securities and Exchange Commission’s New York Regional Office, under the direction of Regional Director George Canellos.
The government is represented by Assistant U.S. Attorney Justin W. Arnold of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force 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.
Defense counsel: Gerald Krovatin, Esq, Newark