Loles of Farnbacher Loles accused of embezzling church funds

[Phokaioglaukos]

http://www.nhregister.com/articles/2009/...016016.txt

 

Investment manager targeted in church loss

Tuesday, December 8, 2009

By James Tinley, Register Staff


ORANGE — The investigation into a potentially massive embezzlement of St. Barbara Greek Orthodox Church funds is centering on the man placed in charge of the church’s investments, who has been identified by multiple sources as Gregory Loles.

Loles was in charge of managing the church’s building fund and endowment, and several church members allowed Loles to handle their personal retirement and college investments, several sources within the church community said.

As the federal investigators begin looking at the case, state Attorney General Richard Blumenthal said his office is reviewing facts to determine whether state laws were broken. But the U.S. Department of Justice has the lead in the investigation, he said.

“Sadly and tragically, this potential fraud seems to be of massive magnitude — making the federal investigation and involvement very appropriate,�? Blumenthal said. “We are reviewing whether there are potential violations of state statutes and how we can pursue them and aid the federal investigation. We understand the FBI is actively involved, and we would commonly defer to federal criminal authorities in their criminal investigation. But there may well be state statutes that merit our investigation.�?

Several parishioners at a private emergency meeting held Sunday afternoon to explain to parishioners the potential fraud asked, but were not told, how Loles came to be in charge of the money, which could total more than $1 million, according to two church members who spoke on condition of anonymity.

Calls placed to Loles’ home in Easton, and a Porsche dealership and service center he owns in Danbury, were not returned.

Joseph Martini, an attorney representing the church, remained tight-lipped about specifics Monday.

“I have been very careful in saying we are a possible victim of a fraud here. The FBI has been contacted, and I think they should be the ones to investigate this,�? Martini said. “We are also conducting our own investigation and will share information in any way that can help the FBI. Clearly, the FBI is doing its investigation, and we’re doing our own investigation to try to figure out what happened.�?

The church community had recently raised millions to help finance a $6.3 million building project.

Asked what assurances parishioners have future donations will be safe, Martini responded: “It would be safe to say the church is going to do everything in its power to make sure any money and donations given to the church will be in safe hands.�?

The depth of the alleged fraud is believed to extend beyond church funds to individual church members.

People at the emergency meeting said they had invested entire retirement savings and college funds with the man placed in charged of the church’s finances, state Rep. Themis Klarides, R-Derby, said after the meeting.

One person at the meeting claimed to have lost $4 million, sources said.

Assistant Police Chief Edward Koether said he has been in contact with the church’s lawyer and is leaving the investigation to the FBI, unless local police participation is requested.

“It’s a case that best fits their (the FBI’s) expertise,�? Koether said.

Blumenthal said federal authorities have broader laws and jurisdiction that are likely more applicable to a potential financial fraud.

“The reason for deferring to federal criminal authorities is they have stronger and broader laws that can produce more effective remedies in cases of fraud that may cross state lines, and clearly there is a multi-state aspect to this potential crime,�? Blumenthal said. “We are prepared to investigate as long as it will not interfere with the federal inquiry, which we will seek to assist.�?

An FBI spokesman could not be reached for comment.

In 1995, Loles registered a finance firm called Apeiron Capital Management Inc. with the secretary of the state. Ads for Apeiron Capital Management listing Loles’ name and a now non-working telephone number ran in church newsletters as late as 2007.

But according to a 1997 Securities and Exchange Commission news release, Apeiron’s broker-dealer registration with the regulatory body was canceled that year for failing to “comply with applicable requirements of the Securities Investor Protection Corp.�? or failing to “be a member of a self-regulatory organization.�?

SEC registration is required for handling more than $25 million of total investments. A search of state databases shows no record of Loles being a certified financial planner.

Loles is also registered with the secretary of the state as the principal of Farnbacher Loles Motor Sports, LLC., an independent repair shop that specializes in after-market performance upgrades to Porsches. He also is part owner of a racing team.

The business is near Danbury Municipal Airport. Farnbacher Loles Motor Sports also has a racing team that operates on both sides of the Atlantic Ocean, according to the company’s Web site.

Church members have been reluctant to talk publicly about the alleged embezzlement, and church officials told parishioners it is a private matter and should not be discussed with the press.

Reached by phone, former church council President James Bitzonis said: “Our attorneys are handling it and I’ll leave it to them to speak

[dmano]

The all mighty devil dollar

[TwentySix]

http://newhaven.fbi.gov/dojpressrel/pres...120110.htm


For Immediate Release
December 1, 2010
United States Attorney's Office
District of Connecticut
Contact: (203) 821-3700 


Investment Advisor, Race Team Owner Charged with Operating $10 Million Fraud Scheme

The United States Attorney for the District of Connecticut today announced that a federal grand jury sitting in Hartford has returned a 32-count indictment charging GREGORY P. LOLES, 51, of Easton, with securities fraud, wire fraud, mail fraud and money laundering offenses stemming from an alleged fraud scheme that defrauded several investors, including a Connecticut church, of millions of dollars.

The indictment alleges that LOLES owned Apeiron Capital Management, Inc., which was an investment adviser and broker dealer registered with the U.S. Securities and Exchange Commission from 1995 through 1998, at which point the registrations were cancelled. However, LOLES continued to operate Apeiron as an unregistered investment adviser and falsely represented Apeiron to be a registered investment management firm. LOLES also was the majority owner and managing member of Farnbacher Loles Motor Sports, Farnbacher Loles Racing, Farnbacher Loles Street Performance, and various other Farnbacher Loles businesses, which were based in Danbury. Farnbacher Loles was engaged in the business of professional race team operations and servicing high-performance automobiles.

The indictment alleges that LOLES falsely represented to numerous victim-investors, including friends and fellow parishioners of a Church in Orange, Connecticut, that he would act as their investment adviser and invest their funds through Apeiron in various securities including in what he described as "Arbitrage Bonds," which LOLES represented would provide investors with a safe and steady return. LOLES also was selected to serve on the board of the Church's Endowment Fund and was entrusted to manage the Church's investment funds, including the Endowment Fund and the Building Fund, by investing in, among other things, Arbitrage Bonds. However, the Arbitrage Bonds did not exist.

It is alleged that LOLES caused numerous victim-investors to invest more than $10 million with him and Apeiron. LOLES failed to invest the money as represented, and instead diverted investors' funds for his own personal use and benefit, including to pay personal expenses such as credit card bills, and to distribute a large amount of the funds to Farnbacher Loles.

It is alleged that some of the individual investors provided LOLES with funds that had previously been invested in IRAs, 401(k)s, or were proceeds of life insurance payments.

As part of the alleged scheme to defraud, LOLES provided investors with fraudulent account statements and also made periodic "lulling" payments to certain investors using a portion of other victim-investors' funds.

The indictment also alleges that LOLES defrauded clients of Farnbacher Loles.

The indictment charges LOLES with seven counts of mail fraud, 10 counts of wire fraud, nine counts of securities fraud, and six counts of money laundering. The mail fraud, wire fraud and four of the money laundering charges carry a maximum term of imprisonment of 20 years. Two of the money laundering charges carry a maximum term of imprisonment of 10 years, and the securities fraud charges carry a maximum term of imprisonment of five years.

The U.S. Attorney stressed that an indictment is only a charge and is not evidence of guilt. Each defendant is entitled to a fair trial at which it is the government's burden to prove guilt beyond a reasonable doubt.

This case is being investigated by the Federal Bureau of Investigation, with the assistance of the U.S. Securities and Exchange Commission. The case is being prosecuted by Assistant United States Attorney Michael S. McGarry.

This prosecution falls under the umbrella of the President's Financial Fraud Enforcement Task Force, which includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The Task Force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit: http://www.StopFraud.gov.

[dmano]

Tell me this is not the same guy.