U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19761 / July 14, 2006
Securities and Exchange Commission V. Pittsford Capital Income Partners, L.L.C., et al., Civil Action No. 06 CV 6353 (MAT) (W.D.N.Y.)
SEC Brings Emergency Action Against Mark Palazzo, Edward Tackaberry and Certain Affiliated Entities to Halt Ongoing Fraud Perpetrated on Senior Citizens
The Securities and Exchange Commission announced today that it filed an emergency enforcement action to halt fraudulent conduct against Edward "Ted" Tackaberry ("Tackaberry"), Mark Palazzo ("Palazzo"), Pittsford Capital, L.L.C., Pittsford Capital Mortgage Partners, L.L.C., Pittsford Capital Group, Inc., Pittsford Capital Income Partners, L.L.C., Pittsford Income Partners II, L.L.C., Pittsford Income Partners III, L.L.C., Pittsford Income Partners IV, L.L.C., Pittsford Income Partners V, L.L.C., Jefferson Income Partners (collectively, the "Defendants") and Michael Latini ("Latini"), Communicate Wireless, L.L.C. ("Communicate Wireless"), and Monroe Wireless, L.L.C. ("Monroe Wireless") (the "Relief Defendants").
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: (i) making, and failing to disclose, transfers of large amounts of money, including a $2.4 million payment to Communicate Wireless, an entity that Tackaberry and Palazzo had significant personal interests in; (ii) making, and failing to disclose, transfers of money to Palazzo; (iii) 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 (iv) 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. The Defendants targeted senior citizens and retirees when soliciting investments in these real estate investment companies, and then misappropriated their funds.
The Complaint charges the Defendants with violating Section 17 (a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.
In its emergency enforcement action, the Commission is seeking, among other emergency relief, a temporary restraining order (i) freezing the Defendants and Relief Defendants' assets; and (ii) 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.
[Securities and Exchange Commission v. Pittsford Capital Income Partners, L.L.C., et al., Civil Action No. 06 Civ.6353 (MAT) (W.D.N.Y., filed July 14, 2006)] (L.R.19761)
PERSONS TO CONTACT:
Helene Glotzer, Associate Regional Director, 212-336-0078
Bruce Karpati, Assistant Regional Director, 212-336-0104
David Stoelting, Senior Trial Counsel, 212-336-0174