Man charged in Ponzi scheme speaks out

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March 20, 2013, 8:34 pm
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(NECN: Peter Howe, Boston/Brookline, Mass.) "Here’s what my attorney told me to tell you: The last press conference is what will be the most important. Not what you have now," said Steven Palladino.

In his first comment to the media since being arraigned Monday on an 11-count Ponzi scheme indictment, that was what the accused had to say Wednesday in a brief off-camera interview with NECN Wednesday afternoon outside his West Roxbury, Mass. home.

The clear implication: There is much more to come out about just what did and did not happen at Viking Financial Group, the 5.5-year-old investment firm that Palladino and his wife, Lori, are accused by the Suffolk County District Attorney of turning into a multimillion-dollar Ponzi scheme that they used to pay for casino debts, travel, a Rolex watch, a $51,000 student loan, and rent assistance for Steven Palladino’s mistress.

Among those hoping that this story is not what prosecutors so far say it is are leaders and members of the American Legion Post 11 in Brookline Village. Post commander Dr. Ronald Nasif and financial director Herb Taymor, in separate telephone interviews, said the post invested $90,000 in funds with Viking Financial after, according to Taymor, a vote of post members.

They both said they are waiting and hopeful the post will be able to get all its money back.

"We don’t really have any more information at this point," Taymor said.

Nasif said he and friends of his also invested personal funds with Palladino at Viking.

Both Nasif and Taymor confirmed that it was true for them that, as Palladino’s attorney, Walter Prince of Prince Lobel Tye LLP said Monday, "Every investor, to my knowledge, has been paid to date. Nobody lost a dime" and investors received every interest payment they were promised by Viking.

The company billed itself as a high-interest-rate, short-term lender for real estate loans, according to prosecutors. The concern Nasif and Taymor have now is whether the joint Suffolk DA/Boston Police investigation that seized Viking’s bank accounts will jeopardize its business operations and their chances of getting their capital repaid.

However, during Palladino’s arraignment Monday, assistant Suffolk DA Benjamin Goldberger described Viking as a straight-up Ponzi scheme that took in nearly $4 million from investors, used new money to make payments to old investors so new investors would keep investing. Meanwhile, he said, the Palladinos diverted hundreds of thousands of dollars for a "lavish lifestyle" and casino splurges and debts and, in one instance, a nearly $350,000 payment made to Steven Palladino he used to get off probation in connection with a case in which he was accused of swindling a 94-year-old aunt out of real estate.

In the indictment, Steven Palladino – who prosecutors said had been convicted of larceny two dozen times in Suffolk and Norfolk superior courts – was charged with being "a common and notorious thief," a designation that if he is convicted could make any prison sentence he gets longer.

By the time Boston Police detectives seized Viking’s operating account, just $160,000 was left in it, and Goldberger said the firm’s "books were cooked" with "fake loans."

In court Monday, Clerk Magistrate Gary D. Wilson asked Goldberger how the Palladinos got investors, and Goldberger said: "Investors are from a couple of groups. One of them are friends of the Palladinos or friends of a friend of the Palladinos by the name of Ken Martin. Investors met Mr. Palladino through Mr. Martin or just through knowing him from the West Roxbury area. One of them is a former business partner. Another one is a childhood friend of Mr. Martin's, some of his friends. Another group of investors -- and those are the investors for whom you actually have charges in front of you -- there's a significant group of additional investors that were introduced through a good friend of Mr. Palladino's by the name of Mr. Nasif, and actually, one of the investors, one of the counts of larceny, the investor was introduced to Mr. Palladino by Mr. Nasif. Mr. Nasif is a family friend of that investor. So it's essentially word of mouth."

It is not clear whether the "Mister Nasif" Goldberger referred to is Dr. Ronald Nasif or a different person, and the Suffolk DA’s office said it would not comment on that person’s identity beyond what Goldberger said in court.

Martin, a former Parkway Youth Soccer leader, owns a home across the street from where Steven and Lori Palladino are building a new home on a formerly vacant lot in West Roxbury. Martin said Wednesday that is "a total coincidence" and he had nothing to do with the Palladinos buying the land there.

Martin said, because West Roxbury is a tight-knit neighborhood, he does know people who he later found out had invested with Palladino, whom he declined to name, but Martin denied having had any role in recruiting them or connecting them to Palladino.

Martin expressed mystification over how Goldberger had portrayed him in his court comments and concern he could be interpreted or perceived as any kind of accomplice.

One question a number of Viking investors are now asking is, if it is a Ponzi scheme, how much is left and available for them to recoup.

City of Boston Assessing Department records show the Palladinos' Lyall Street home is assessed at $475,500, and the Mt. Vernon Street land where they have recently started  building a home is assessed at $172,000. Steven Palladino is listed as the owner of a two-family home on Kittredge Street in Roslindale that is assessed by the city as being worth $448,800 and was recently listed for sale by William Raveis Real Estate at $599,900.

Goldberger said in court Monday, asking the magistrate to set bail at $250,000 cash, that he was concerned Steven Palladino was preparing to sell that home as part of an effort to "liquidate assets" and flee from Boston.

Steven Palladino and Gregory Palladino are listed with Secretary of State William Francis Galvin’s office as the managers of iScream Works LLC, the five-year-old Centre Street ice cream shop above which Viking kept offices.

October 12, just eight days after Viking Financial transferred the property to a S&L Palladino LLC, the Palladino LLC sold a commercial building at 38 Spring Street, across from a Shaw’s supermarket, for $195,000 to a realty trust, according to Suffolk Registry of Deeds data. The new owner of the Spring Street property, Alissar Lakkis, said Wednesday she has no connection to Palladino besides just buying that property from him.

Comments from Palladino and his attorney, however, suggest they think it’s much too soon to question what assets are there to be recouped by Viking investors.

"He is entitled to the presumption of innocence," Prince said, "and I hope everyone respects that."

Tags: Boston, massachusetts, Peter Howe, Boston Police, Brookline, American Legion, suffolk county district attorney, Lori Palladino, Steven Palladino, Palladino, Ronald Nasif, Herb Taymor, Benjam Goldberger, Viking Investments
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