DA: West Roxbury couple behind massive Ponzi scheme
Two West Roxbury residents ran an investment company that used money from new customers to pay off old ones - and to finance gambling forays, vacations in the Bahamas and rent for the husband's mistress, the Suffolk County District Attorney's office charges.
A Suffolk County grand jury last week returned indictments against Steven and Lori Palladino for loan sharking, larceny and making false entries in corporate books. Steven Pallidino is scheduled for arraignment today on those charges, as well as being "a common and notorious thief based on more than two dozen prior larceny convictions in Suffolk Superior and Norfolk Superior courts," the DA's office reports. Lori Palladino is scheduled for arraignment on April 4.
According to the DA's office, the two have funneled millions of dollars through Viking Financial Group - located in a small office above iScream on Centre Street, which they also own - since they incorporated it in 2007:
Viking borrowed money from investors, who were told by Steven Palladino that the funds would be used to provide loans at a higher interest rate. Very little of the money was used to make loans, prosecutors said, and it instead funded a lavish lifestyle for the Palladinos. Money borrowed from new investors was then used to repay earlier investors and to make monthly interest payments to all of the investors, prosecutors said.
Transactions show that investors' money was often transferred from Viking’s account into personal accounts held by the Palladinos and used to cover personal expenses including a vacation in the Bahamas, rent for Steven Palladino’s mistress, and hundreds of thousands of dollars paid to casinos to cover apparent gambling losses, prosecutors said.
In addition, Steven Palladino allegedly made use of investors' funds when he paid $350,000 to satisfy a condition of his probation on a 2007 Superior Court conviction for defrauding an elderly relative.