A West Roxbury couple and their son were arraigned Friday on charges of operating a Ponzi scheme that cheated their investors out of more than $10 million, District Attorney Daniel F. Conley said.
Steven Palladino, 56, Lori Palladino, 52, and son Gregory Palladino, 28 were arraigned in Suffolk Superior Court on one count each of larceny over $250, larceny over $250 from a person over 60. Steven, Lori, and Gregory Palladino were each additionally charged with conspiracy to commit larceny, Conley’s office stated in a statement.
Gregory faced additional charges of withholding evidence and three counts of usury and Steven was also arraigned on one count of usury for which he had previously been arraigned in West Roxbury District Court. The indictment moves the case to Superior Court, where it will be adjudicated, the DA said.
Steven Palladino’s bail remain at $25,000, at the request of Assistant District Attorney Benjamin Goldberger, Clerk Magistrate Gary Wilson while Lori and Gregory Palladino were released on their own recognizance.
The parents and son had owned a financial company, Viking Financial Group since 2007 and operated a Ponzi scheme through their company, the DA said. Prosecutors said The Palladino family borrowed between $10 to $13.8 million from 42 individuals, families, and groups of investors who believed that the funds would be used to provide high-interest loans.
“Very little of the funds were used to make loans, and the loans that were made often bore interest rates above the maximum 20 percent interest rate allowed under state law,” prosecutors said.
Steven and Lori allegedly entered fake loans into Viking’s corporate books to make them appear balanced. The couple along with their son then transferred the funds from corporate accounts into private accounts and used it to fund a lavish lifestyle, including luxury vehicles, a vacation to the Bahamas, and casino trips resulting in apparent gambling losses totaling hundreds of thousands of dollars, prosecutors said.
Steven and Lori Palladino, and Viking Financial Group also face earlier charges related to the same Ponzi scheme involving more victims and greater losses.
The earlier indictment charges Steven and Lori with two counts each of uttering a false document and tampering with evidence and three counts each of making false entry on corporate books and usury. Steven was additionally charged as a common and notorious thief, the DA said in a statement. Viking was charged with one count of tampering with evidence, two counts of uttering, and three counts of usury.
Each of the defendants is due back in court on Dec. 8.