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Can you imagine somebody specializing in ripping off priests, nuns and elderly Catholics? Apparently that is exactly the business another mini Madoff, the 82-year-old Richard S. Piccoli was in. His 33-year-old business, Gen-See Capital Corp., the vehicle for committing the alleged fraud was finally put to rest earlier this month. We can only hope that Picolli's 33-year-old business does not follow Jesus's example and get resurrected in some other form, someplace.

01/23/09 06:24 AM
Attorney insists Piccoli’s alleged Ponzi scheme is ‘out of business’
By Michael Beebe
NEWS STAFF REPORTER

If any doubt remained that Richard S. Piccoli’s alleged Ponzi scheme ended with his arrest this month, his lawyer made it official Thursday as Piccoli, 82, appeared in federal court.

Attorney Joel L. Daniels made the declaration, even as a lawyer for the Securities and Exchange Commission and U. S. District Judge William M. Skretny discussed how to make a restraining order against Piccoli clearer.

“We’re out of business; we’re not going to be selling anything,” Daniels told the judge, as his client sat in the courtroom.

Daniels said he had no objections to Skretny extending a temporary restraining order against Piccoli and his Gen-See Capital Corp. while the judge fine-tunes a permanent injunction.

David Stoelting, an SEC senior trial counsel, said outside the courtroom that SEC accountants started going over Piccoli’s records last week.

“It was a vast sprawling scheme that was clearly going on for many, many years,” Stoelting said.

The SEC and federal prosecutors, he said, have so far identified more than 500 Gen-See investors and expect more to come forward as accountants comb through the records. Piccoli said he has been in business for 33 years.

Stoelting has investigated other Ponzi schemes, in which investments from the most recent investors are used to pay off the earlier ones. He said the calls coming in to a hotline and to him personally are emotional.

“It’s people who call up and say, ‘That was my life savings,’ ” Stoelting said.

Attorney Vincent E. Doyle III was in court representing investors.

Doyle’s firm, Connors Vilardo, represents the Buffalo Catholic Diocese, but Doyle said the diocese itself did not invest with Piccoli.

“I am representing priests and nuns who invested with him,” he said.

At the time of Piccoli’s Jan. 8 arrest on a charge of mail fraud, U.S. postal inspectors cited Piccoli’s numerous ads in Catholic publications, including church bulletins.

The diocese set up an investment fund for its clergy, but Piccoli told an undercover postal inspector that the fund paid only 3 percent interest, while his Gen-See Capital paid a guaranteed 7 to 8 percent interest.

Postal inspectors and IRS agents found no record that Piccoli invested in mortgages as he told his clients.

Daniels said he and Piccoli’s other attorney, Richard T. Sullivan, will meet soon with Assistant U. S. Attorney Gretchen L. Wylegala to try to retrieve Piccoli’s financial records.

“They took everything,” Daniels told the judge.

Prosecutors said the records show that more than $16 million moved in and out of Gen-See’s accounts in the past two years.

Skretny earlier froze $4 million that remained in Piccoli’s accounts, money that is expected to be returned to investors eventually.

“His lawyers are making an effort to tell us what happened to the money,” Stoelting said outside the courtroom.

The Buffalo News reported last week that the IRS was informed in 1993 by an attorney representing investor Ralph Sigl that Piccoli was improperly telling clients the investments were tax-free. And a former IRS lawyer told a judge in 1998 that he believed Piccoli was running a Ponzi scheme.

Stoelting declined to comment on why authorities did not investigate Piccoli earlier.

He said the SEC moved quickly once the postal inspectors and the IRS began the recent investigation.

mbeebe@buffnews.com

Source: The Buffalo News