Middletown, New Jersey, Investment Manager Charged With Using Ponzi Scheme To Steal $5.3 Million
NEWARK, N.J. – An investment manager with an office in Middletown, New Jersey, will appear in federal court today to face charges that he fraudulently concealed investment losses and diverted at least $5.3 million in investor money for his personal use, U.S Attorney Paul J. Fishman announced.
Vincent P. Falci, 57, of Middletown, was charged with two counts of wire fraud and one count of securities fraud. He is scheduled to appear this afternoon before U.S. Magistrate Judge Steven C. Mannion in Newark federal court.
According to the complaint unsealed today:
Falci controlled a number of investment funds under the names “Saber Funds,” and “Vicor Tax Receivables LLP” (the Vicor Fund). In addition to touting his investment skill and experience, Falci concealed losses from investors and falsely told them that his funds were growing year after year. Based on these misrepresentations, investors continued to entrust additional funds to Falci and left previous investments under his control.
The Saber Funds were a collection of investment funds that Falci created and operated, starting in the late 1990s or early 2000s. Falci told investors that the Saber Funds were conservatively invested in securities such as tax liens and that the fund’s investments continued to show positive returns. In reality, Falci redirected investor money to a number of riskier ventures, such as day trading and real estate. Many of these investments lost money, which Falci concealed from the investors.
On Sept. 18, 2015, Falci entered into a consent order with the N.J. Bureau of Securities in which he admitted to violating New Jersey securities laws while operating the Saber Funds. Among other things, Falci admitted to misleading investors and paying himself and family members over $1 million between 2006 and 2009. The order required Falci to pay restitution of $6,742,697.57.
In order to pay the Saber Funds investors the gains he had promised, Falci stole money from the Vicor Fund, which he controlled through his management entity “Vidon Capital Partners LLC” (Vidon). Even after the September 2015 consent order required Falci to divest himself of his controlling interest in all funds and management entities, Falci continued to use his control of the Vicor Fund and Vidon bank accounts to steal money from the Vicor Fund.
Altogether, Falci allegedly stole $5.3 million from the Vicor Fund between January 2015 and May 2016. While most of that money was used to repay prior investors in the Saber Fund, Falci siphoned over $500,000 of investor money to enrich himself and family members.
Each charge in the complaint carries a maximum potential penalty of 10 years in prison and a $250,000 fine.
The charges and allegations in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Relatedly, the N.J. Bureau of Securities will today file a motion to enforce the terms of the consent order entered in N.J. Superior Court on Sept. 18, 2015 between the N.J. Bureau of Securities and certain related entities and individuals based on many of the same facts alleged in today’s federal criminal complaint. For information on the motion, contact Lisa Coryell at 973-504-6510.
U.S. Attorney Fishman credited inspectors of U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge James V. Buthorn, with the investigation leading to today’s charges. He also thanked the N.J. Bureau of Securities in the State Attorney General’s Office, under the direction of Attorney General Christopher S. Porrino and Bureau Chief Laura H. Posner, for its assistance in the investigation.
The government is represented by Assistant U.S. Attorney Justin Herring of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Joseph Sorrentino, Staten Island, New York.