SEC Announces Emergency Action to Halt $15 Million Fraud Against Senior Citizens
SEC Seeks Asset Freezes, Accountings and Appointment of a Temporary Receiver
FOR IMMEDIATE RELEASE
Washington, D.C., July 14, 2006 - The Securities and Exchange Commission announced today that it filed an emergency enforcement action to halt a fraudulent real estate investment scheme that bilked senior citizens and retirees out of millions of dollars since 1996.
The SEC's complaint, filed in the Western District of New York, charges Edward "Ted" Tackaberry, Mark Palazzo and certain related real estate investment companies, including Pittsford Capital, L.L.C., Pittsford Capital Mortgage Partners, L.L.C., and Pittsford Capital Group, Inc., with making fraudulent solicitations and misappropriating investor funds. The Commission also charged Michael Latini, Communicate Wireless, L.L.C., and Monroe Wireless, L.L.C. as relief defendants.
In its emergency enforcement action, the Commission seeks an asset freeze, appointment of a temporary receiver and the return of the defendants' ill-gotten gains.
"This case emphasizes the SEC's commitment to protecting elderly investors and to holding accountable those who defraud senior citizens of their savings," said Mark K. Schonfeld, Director of the Commission's Northeast Regional Office. "This case also highlights the importance and timeliness of the SEC's upcoming Seniors Summit to help protect older Americans from investment fraud."
The complaint alleges that from approximately 1996 to 2004, Tackaberry and Palazzo raised, in unregistered transactions, at least $15 million from at least 275 investors, including many senior citizens, by issuing promissory notes in various real estate investment companies. Tackaberry and Palazzo owned and managed all of these real estate investment companies. The complaint further alleges that the defendants have been engaged in a fraudulent scheme, in which the defendants have made numerous misrepresentations and omissions to investors concerning their investments and the real estate investment companies' financial condition, including
- making, and failing to disclose, transfers of large amounts of money, including a $2.4 million payment to Communicate Wireless, L.L.C., an entity that Tackaberry and Palazzo had significant personal interests in;
- making, and failing to disclose, transfers of money to Palazzo;
- failing to disclose that that they commingled the real estate investment companies' assets in one bank account to fund the operations of certain of the real estate investment companies; and
- falsely claiming that certain of the real estate companies would retain an independent third-party agent to represent investors' interests in connection with the offerings.
In its emergency enforcement action, the Commission is seeking, among other emergency relief, a temporary restraining order freezing the defendants and relief defendants' assets and appointing a temporary receiver over the real estate investment companies and affiliated entities. In addition to this emergency relief, the Commission also seeks orders enjoining the defendants, preliminarily and permanently, from committing future violations of the foregoing federal securities laws, and a final judgment ordering the defendants to disgorge ill-gotten gains and assessing civil penalties.
The SEC's Seniors Summit will be held on Monday, July 17th at 10:00 A.M., E.D.T., at SEC Headquarters and will be webcast live on the Commission's Web site (www.sec.gov).
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- Helene Glotzer, Associate Regional Director, 212-336-0078
- Bruce Karpati, Assistant Regional Director, 212-336-0104
- David Stoelting, Senior Trial Counsel, 212-336-0174
Additional materials: Litigation Release No. 19761