Owner of ameripay lLC and sherbourne capital management sentenced to 30 months in prison for defrauding clients of $10.2 million
FOR IMMEDIATE RELEASE
May 18, 2011
NEWARK, N.J. – A Saddle Brook, N.J., man was sentenced today to 30 months in prison and ordered to pay $8.6 million in restitution for defrauding the clients of his payroll services company, including public entities and private companies, and using their money to satisfy the payroll and tax obligations of other entities, U.S. Attorney Paul J. Fishman announced.
Arthur Piacentini, 51, previously pleaded guilty to conspiracy to commit wire fraud before U.S. District Judge Jose L. Linares, who also imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
From December 2004 through May 2009, Piacentini operated Ameripay LLC with Paul Bultmeyer, 71, of Upper Saddle River, N.J., who also pleaded guilty to wire fraud conspiracy and was sentenced by Judge Linares to 60 months in prison on March 18, 2011. 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 would receive 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. Because of the shortfall, Ameripay was unable to fulfill its obligations to its clients and was not making payments on time. Piacentini and Bultmeyer used millions of dollars sent by other 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.
At the same time, Piacentini and Bultmeyer also owned purported investment company Sherbourne Capital Management, Ltd. and Sherbourne Financial, Ltd. (collectively, “Sherbourne”). Piacentini conspired to recruit additional clients to Sherbourne whose money was sent to Ameripay to be used to pay the obligations of others.
The clients of both Ameripay and Sherbourne 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 and restitution, Judge Linares sentenced Piacentini to serve three years of supervised release.
U.S. Attorney Fishman credited 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, and also thanked the U.S. Securities and Exchange Commission’s New York Regional Office, under the direction of Regional Director George Canellos.
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.
The government is represented by Assistant U.S. Attorney Justin W. Arnold of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
Defense counsel: Kelly Daniels Esq., Chatham, N.J.