A West Roxbury man is expected this afternoon in Suffolk Superior Court on charges that he and his wife ran a multi-million dollar Ponzi scheme.
Steven Palladino, 55, and, and his wife, Lori Palladino, 52, allegedly used investors' funds to pay for "their own lavish lifestyle," according to a press release from District Attorney Dan Conley and Boston Police Commissioner Edward Davis.
Lori Palladino is not scheduled to appear today, but is scheduled to appear next month.
Boston Police detectives began the investigating last year and on March 13, a Suffolk County Grand Jury returned indictments against the Palladinos, charging the couple with four counts of larceny of more than $250, three counts of making false entries in corporate books, one count of uttering, and three counts of usury -commonly referred to as loan sharking. Steven Palladino is also charged as a common and notorious thief based on more than two dozen prior larceny convictions in Suffolk Superior and Norfolk Superior courts.
Steven Palladino’s arraignment scheduled for 2 p.m. today, while Lori Palladino and the corporation are scheduled to be arraigned on April 4.
According to prosecutors, the Palladinos operated a Ponzi scheme through their company, Viking Financial Group, Inc., which Lori Palladino and the couple’s 28-year-old son incorporated in 2007. The three family members are the company’s sole employees. This company is based in West Roxbury above iScream Works, which the Palladinos also own.
West Roxbury Patch previously covered two issues involving Steven Palladino. In 2010, Patch visited his office with At-Large City Councilor Felix Arroyo. Palladino complained to Arroyo about a controversial immigration law in Arizona brought, and frustrations about Centre Street parking. In November of 2010, Steven Palladino and his son Greg appeared at the West Roxbury Neighborhood Council wanting to erect a building at 38 Spring St.
Viking allegedly borrowed money from investors, who were told by Steven Palladino the funds would be used to provide loans at a higher interest rate. But according to prosecutors, very little of the money was used to make loans, 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, thus the Ponzi scheme.
Transactions allegedly show investors’ money was often transferred from Viking’s account into personal accounts held by the Paladinos 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.
Also, Steven Palladino allegedly used 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.
Prosecutors said fake loans were entered in Viking’s corporate books to make them appear balanced. Some of the named borrowers for some of the fake loans did, in fact, receive real loans as well, and were on the books for real loans and fake loans. So a person might have been on the Viking books for a $10,000 loan he actually received and for a $100,000 loan he never received, according to a press release.
The indictment also alleges three of the real loans Viking extended in 2007 and 2008 charged interest rates well beyond the 20 percent maximum allowed by state law. Of those loans, prosecutors said two charged interest exceeding 60 percent and a third charged more than 200 percent interest.
West Roxbury Patch will bring more on this story.