TRENTON –Attorney General Gurbir S. Grewal announced that a father and son were sentenced to prison today for defrauding investors in two successive multi-million dollar scams involving sales of bogus investments. After defrauding 26 investors in the first scam, the father and son agreed to pay $5.5 million, including $4 million in investor restitution, to settle a lawsuit filed by the New Jersey Bureau of Securities. They then proceeded to defraud 15 of the same investors of $3 million in a second scam.
These defendants were sentenced to state prison today by Superior Court Judge Robert M. Vinci in Bergen County:
George Bussanich Sr., 61, of Park Ridge, N.J., was sentenced to 10 years in state prison. He pleaded guilty on March 25, 2019 to first-degree conspiracy to commit securities fraud and money laundering.
George Bussanich Jr., 40, of Saddle River, N.J. – who solicited investor funds with his father, George Sr., and mother, Wilma – was sentenced to eight years in state prison. He pleaded guilty on March 25, 2019 to second-degree securities fraud and second-degree money laundering.
Wilma Bussanich, 58, of Park Ridge, N.J., was sentenced today to five years of probation and 125 hours of community service. She pleaded guilty previously to third-degree money laundering. Those three defendants are jointly and severally liable for full restitution to the victims, along with four additional defendants listed below who are awaiting sentencing. The defendants agreed to forfeit all assets seized in the investigation.
Special Deputy Attorney General Brandy Malfitano, currently an Assistant Prosecutor for the Bergen County Prosecutor’s Office assigned to the case, and Deputy Attorney General Amy Sieminski prosecuted the defendants for the Division of Criminal Justice Gangs & Organized Crime Bureau. Other Assistant Prosecutors at the Bergen County Prosecutor’s Office provided valuable assistance. The defendants were indicted in an investigation by the Division of Criminal Justice.
“Justice demanded that this father and son face substantial prison sentences for their crimes,” said Attorney General Grewal. “It was bad enough that they stole the life savings of elderly investors to bankroll their own expensive homes, cars and entertainment, but they did not stop there. Instead, they defrauded many of the same retirees a second time after the first scheme was exposed, playing on their desperation to recover their lost savings.”
“These defendants perpetrated a classic Ponzi scheme in which they used a small fraction of the invested funds to pay investors purported ‘dividends’ or ‘returns’ and conceal that they were diverting most of the funds for their personal use,” said Director Veronica Allende of the Division of Criminal Justice. “We will continue to work with the Bureau of Securities to investigate and aggressively prosecute any dishonest operators who defraud New Jersey investors and deprive them of their hard-earned savings.”
“As a result of the Bureau’s previous civil action and this prosecution by the Division of Criminal Justice, these financial predators are being held fully accountable for what they did,” said Bureau of Securities Chief Christopher Gerold. “These lengthy prison sentences send a clear message that those who lie, cheat, and steal from New Jersey investors will not go unpunished.”
The following defendants pleaded guilty previously and are scheduled to be sentenced on Feb. 18, 2020. The state will recommend that each of these defendants receive a sentence of probation.
- Bryan Nazor, 48, of Chestnut Ridge, N.Y., an attorney, pleaded guilty to third-degree charges of conspiracy and theft.
- Heidi Francavilla, 61, of Park Ridge, N.J., pleaded guilty to third-degree money laundering.
- Robert Schooley, 58, of Park Ridge, N.J., an accountant, pleaded guilty to third-degree money laundering.
- Christopher Hanna, 38, of Parlin, N.J., pleaded guilty to third-degree money laundering.
The $5.5 million settlement obtained in August 2014 by the Bureau of Securities, within the Division of Consumer Affairs, resolved a lawsuit that alleged that from May 2009 to July 2013, George Bussanich Sr. and George Jr. misled investors in the sale of unregistered investment notes in Metropolitan Ambulatory Surgical Center, LLC (MASC). The Bureau of Securities found that the Bussaniches defrauded 26 investors of more than $4 million. Despite its name, MASC was not an actual surgical center, but simply a holding company controlled by Bussanich Sr. The Bussaniches made dividend payments to investors out of the initial principal funds, thereby deceiving investors into believing their investments were generating profits. Meanwhile, they diverted investor moneys to buy multiple homes and seven luxury cars – including two Maserati Quattroportes, a Ferrari F430 Spider and a Mercedes ML350 – and to pay for lavish shopping, dining, travel and entertainment bills.
The consent order obtained by the Bureau of Securities in August 2014 barred Bussanich Sr. and his son from the securities industry in New Jersey, prohibiting them from selling securities and from controlling or acting as officers or directors of any entity that sells securities. However, the investigation by the Division of Criminal Justice revealed that beginning the very next month, the Bussaniches began soliciting investments in a fictitious company called Global Fund Management that they created with Schooley, who was an accountant for the family. Between September 2014 and September 2015, a total of 15 of the original 26 investors invested just over $3 million in the purported business venture. Once again, the defendants fraudulently diverted most of the investor funds for their personal use.
As in the first scheme, the defendants never actually invested the funds from the investors as promised. The investors received monthly “returns,” paid out of the original principal investment, which gave them the impression that the investments were legitimate and were profiting. The defendants would simply move money from one account to another and then disburse a fraction of the funds back to the investors as a “return.” The defendants also used new investor funds to make penalty payments required under the consent order. However, the vast majority of the monies invested went to the personal use and enjoyment of the defendants, including making down payments and mortgage payments on various properties, paying restaurant bills and financing vacations.
Deputy Attorneys General Malfitano and Simienski presented the indictment to the state grand jury for the Division of Criminal Justice Gangs & Organized Crime Bureau, under the supervision of Bureau Chief Lauren Scarpa Yfantis and Deputy Director Annmarie Taggart. They were assigned to the investigation with former Detective Matthew Tully, who was lead detective, under the supervision of Lt. Brian Bruton and Deputy Chief of Detectives Christopher Donohue.
The Bureau of Securities investigation was led by Chief of Enforcement Rudolph G. Bassman.
Bureau of Securities Chief Christopher Gerold urged people to call the Bureau of Securities before they invest to make sure that any securities that are offered to them are properly registered, as required by law. The Bureau can be contacted toll-free within New Jersey at 1-866-I-INVEST (1-866-446-8378) or from outside New Jersey at 973-504-3600.
For George Bussanich Sr.: Michael Baldassare, Esq., Baldassare & Mara, LLC:
For George Jr.: Mark Berman, Esq., Hartman, Doherty, Rosa, Berman & Bulbulia, LLC;
For Wilma Bussanich: Michael J. Maher, Esq., Hackensack, N.J.