NEWARK
- The former founder of Wellesley Services
LLC, currently serving a 14-year sentence
in federal prison, has been ordered to pay
$69,291,511 in restitution for defrauding
investors, under the terms of a consent
order announced today by Attorney General
Zulima V. Farber. Thomas Giacomaro also
is permanently barred from holding any type
of securities license in New Jersey.
A judgment also was entered by a Bergen
County judge against Giacomaro’s co-defendants,
Anthony Bianco and Keith Moody. Judge Robert
P. Contillo found that Bianco and Moody
engaged in a scheme to defraud Wellesley
Services investors and ordered them to pay
$73,767,700 in restitution along with a
civil monetary penalty.
The settlement with Giacomaro and judgment
against Bianco and Moody resolve a 2003
lawsuit filed by the Division of Consumer
Affairs’ Bureau of Securities alleging
that since 1995, Giacomaro, Bianco, Moody
and others defrauded hundreds of investors
by luring them into purchasing $80 million
of promissory notes with promises of high
returns on their investments.
“These con artists ripped off honest
investors. They took the hard-earned dollars
of investors and stole the money entrusted
to them so they could live the good life.
But now, the day of reckoning has come,”
Attorney General Farber said. “Through
the diligent work of the State Bureau of
Securities, this scam has been unraveled.”
The Bureau of Securities also settled with
the defendant companies, which are ordered
to pay restitution of $73,767,700 for the
benefit of investors.
The 2003 complaint alleged that Wellesley
Services and several other related companies
were established to consult, develop, promote
and prepare packages of mergers and acquisition
transactions involving privately held companies
in various industries, including solid waste,
recycling, commercial and residential, fuel,
energy, transportation and trucking.
Giacomaro, Bianco and Moody allegedly neglected
to tell investors that their funds would
be used to support the defendants’
private business ventures; to lease expensive
luxury cars for themselves and family members;
to pay personal childcare expenses; to fund
Giacomaro and Moody’s lavish lifestyles;
and to buy and renovate multi-million dollar
homes in upscale neighborhoods.
The three men also failed to tell investors
that the securities they were selling were
not registered in New Jersey as required
by the New Jersey Uniform Securities Law
and that they were not registered to sell
securities of any kind.
“Our
goal is to protect investors who have been
victimized by unscrupulous businesses. By
securing judgments of restitution through
the Giacomaro settlement and the court order,
we have done just that,” said Division
of Consumer Affairs Acting Director Stephen
B. Nolan. “This should serve as notice
to anyone who makes an illegal profit by
violating the trust of a client that the
repercussions of such actions will be harsh.”
Giacomaro previously pleaded guilty in state
and federal courts to Division of Criminal
Justice charges of money laundering and
federal charges of mail fraud and tax evasion.
Giacomaro began serving his current federal
sentence in January 2002, following a 1996
guilty plea to charges of conspiring to
embezzle money from an employee pension
benefit plan and conspiring to defraud creditors
of Imperial Air Freight, Inc. Bianco and
Moody have federal indictments pending against
them for their conduct related to Wellesley
Services.
“This
case underscores our efforts to protect
investors in New Jersey,” said Bureau
of Securities Chief Franklin L. Widmann.
“The Bureau’s investigation
ultimately led to the exposing of this multi-million
dollar fraud against those investing for
their retirements, their children’s
education and other priorities. Scams such
as this one threaten the financial security
of our citizens and investors need to be
wary.”
The investigation was conducted by the New
Jersey Bureau of Securities Supervising
Investigator Rudolph G. Bassman and was
prosecuted by Deputy Attorneys General Victoria
A. Manning and Toral Makani Joshi.
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