Former owner of new jersey equities firm sentenced to 10 years in prison for investment and social security fraud
FOR IMMEDIATE RELEASE
December 16, 2011
NEWARK, N.J. – The former owner Skyline Equities Inc. was sentenced today to 120 months in prison for his theft of more than $800,000 from investors in a scheme involving fictitious overseas investments and from defrauding Social Security, U.S. Attorney Paul J. Fishman announced.
Paul J. LoPapa, 65, of Livingston, N.J., previously pleaded guilty to two Indictments charging him with one count of conspiracy to commit wire fraud and six counts of wire fraud in connection with the investment scheme; and one count of Social Security fraud for fraudulently receiving benefits from August 2001 through October 2007. LoPapa entered his guilty pleas before U.S. District Judge Susan D. Wigenton, who also imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in Newark federal court:
LoPapa admitted that he and an individual identified as “M.B.” solicited investors through Skyline Equities Inc., based in Livingston, for an investment program referred to as the “Bank Guarantee Program,” which they billed as a sophisticated international financial instrument facilitated through well-known financial institutions.
In order to lure investors, LoPapa and others promised high returns, conducting face-to-face meetings with investors at his home. LoPapa and M.B. did not invest the money, but spent it on personal items – including five high-end Mercedes-Benz automobiles. LoPapa also spent investor money to pay for property taxes, health insurance premiums, and credit card purchases for items and services. Investors wired approximately $815,000 into a Skyline account.
LoPapa also admitted to unlawfully receiving Social Security disability payments from August 2001 through October 2007, which totaled approximately $145,000. In his application for disability insurance benefits to the Social Security Administration, LoPapa falsely claimed he had not worked since 1990. LoPapa received benefits even though he was engaged in substantial work activity, including illegal activity in New Jersey.
In addition to the prison term, Judge Wigenton sentenced LoPapa to two years of supervised release and ordered him to pay $145,923 in restitution on the Social Security fraud count and $630,000 to four victims of the wire fraud. The defendant has been in federal custody since his arrest by special agents of the FBI and Social Security Administration - Office of the Inspector General in October 2008.
U.S. Attorney Fishman credited special agents of the Social Security Administration Office of the Inspector General, under the direction of Special Agent in Charge Edward J. Ryan in New York; and special agents of the FBI, under the direction of Special Agent in Charge Michael B. Ward in Newark, with the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Matthew E. Beck of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
Defense counsel: Steven F. Roth of Springfield, N.J.