Accused investor worked to gain the trust of fellow Catholics
Used Catholic priests as references to get clients for alleged Ponzi scheme
Richard S. Piccoli had a gift of gab and a message few could refuse. At a time when people watched their retirement funds evaporating by the month, Piccoli’s mortgage company guaranteed them 7 to 8 percent interest on their investment.
If the offer sounded too good to be true, Piccoli, who ran Gen-See Capital Corp. in Williamsville, offered Catholic priests as references.
He advertised in Catholic newspapers from Buffalo to Anchorage, Alaska, and hit up fellow Knights of Columbus members.
Since January 2007, more than $16 million came through his bank accounts. His clients included 50 priests, churches, religious orders and cemetery associations.
“He was very Catholic and very pro-church,” said one area priest who invested more than $50,000 in retirement savings with Gen-See. “I trusted him, and I thought, ‘Well it’s worth a risk.’ ”
It all came apart, though, Thursday morning, when a team of four agents from the U. S. Postal Service and the IRS went to his office at 5500 Main St., Williamsville, and took him to court.
Piccoli, 82, is the latest to be charged by the federal government with running a Ponzi scheme. He’s accused of using his latest investors to pay off his first.
The Securities and Exchange Commission, which got burned when New York investor Bernie Madoff’s $50 billion Ponzi scheme collapsed after the SEC failed to investigate him, wasted no time with Piccoli. A postal inspector made the initial case against Piccoli, charging him with mail fraud, but the SEC immediately jumped on the case and charged Piccoli on Thursday in a civil complaint with a number of federal offenses.
Piccoli, a short man with thinning gray hair, was led into court in handcuffs and arraigned on the criminal complaint before U. S. Magistrate Judge Jeremiah J. McCarthy.
McCarthy released him without bail until he appears for arraignment Tuesday. The judge asked Piccoli if he needs a lawyer to be appointed.
“I plan to hire one,” Piccoli said, “within the next 48 hours.”
Piccoli declined to comment as he left the courtroom. Assistant U. S. Attorney Gretchen L. Wylegala represented the government.
SEC attorneys observed the proceedings, but their civil complaint against Piccoli was not discussed.
The SEC accused Piccoli of selling unregistered securities and is seeking an immediate freeze on his bank accounts.
Federal prosecutors declined to release the names of any of Piccoli’s investors, and the SEC blanked out investors’ names on checks submitted to the court.
“I’m stupid, I’m one of the guys who invested with him,” said a young Buffalo man who said he gave $10,000 to Piccoli on the advice of a fellow Knights of Columbus member at the Delaware Avenue club.
Two well-known members of that club — Ivano Toscani, owner of the Anchor Bar, and Alfred T. Coppola, a former state senator and Common Council member — both said they knew Piccoli from his past involvement with the Knights of Columbus.
“He was always a gentleman, a very nice guy,” Toscani said of Piccoli. “I haven’t seen him in six or seven years, but I think a lot of the Knights did invest with him.”
Coppola is the current Grand Knight, the leader of Council 184. He said Piccoli gave his business card to a number of Knights over the years and said he is pretty sure that some invested with him.
“I knew he had an investment company. He always seemed like a very nice guy. He was very meticulous in how he dressed,” Coppola said. “He quit the Knights a couple of years ago when he moved his office from Delaware Avenue out to Amherst.” Both Coppola and Toscani said they did not invest with Piccoli.
The younger investor, who asked that his name not be used, said he knew several of the club’s older members invested hundreds of thousands of dollars with Piccoli.
“These are guys who have been his friends for 60 years,” he said.
The priest investor said Piccoli promised a healthy 8.3 percent annual return on his investment. The priest, who asked that his name be withheld, opened an account with Gen- See about five years ago and received regular statements and checks.
“I always asked him, ‘How do you make money?’ ” the priest said.
Piccoli responded by saying he was invested in secure second mortgages.
Other clergy had significantly more money invested with Gen-See, the priest said.
Piccoli used his extensive contacts to grow his clientele. “He could drop names and influence them to give,” said the priest, who hopes he can recover some of his investment.
“We have to put something away for retirement,” he said. “I wouldn’t say I’m wiped out. I’ve been hurt, but . . . I’m sure we’ll get something back.”
“Earn More Worry Less,” read Piccoli’s ad last October in the Western New York Catholic. “Your Money Deserves the Best! Gen-See Makes The Difference.”
No funds of the Buffalo Catholic Diocese were invested with Piccoli, spokesman Kevin Keenan said late Thursday.
“Right now, we are trying to determine whether any of our clergy or Catholic entities invested with this individual or his companies, and what the scope of the investments might have been,” Keenan said. “We’re certainly concerned.”
Piccoli had advertised in the Western New York Catholic for several years, but none of his customers had ever complained about their dealings with him, Keenan said.
If it turns out that Piccoli is guilty of using the newspaper to find customers to scam, that would be disturbing, Keenan said.
“It’s a quality newspaper, and we pride ourselves on having quality advertisers,” he said.
Piccoli’s ad guaranteed a 7.1 percent return, which alone should have raised suspicions, said a local certified financial planner.
“I’d be very nervous about it,” said Richard Schroeder, executive vice president and a managing partner in the firm Schroeder, Braxton & Vogt. “Anything like 7.1 percent interest conveys a lot of risk.”
But Piccoli told his investors there was no risk involved, according to an affidavit from Postal Inspector Shelley K. Carosella.
Piccoli told an undercover investigator that he invested in mortgages and that, in 33 years, he had never cost any of his investors a penny in lost investments.
But the postal inspector, examining Piccoli’s bank accounts, said there was no evidence that he bought any mortgages or did any investing at all.
Piccoli simply took the money in, the inspector said, and paid out monthly interest to his clients. About $600,000 had been transferred to Piccoli’s personal accounts or transferred to his children, the records show.
County records show that Piccoli’s wife, Victoria, died in March 2005 and that his four grown children, who all live out of state, bought his house for $1 and allowed him to live in it.
Carosella, the postal inspector, said Piccoli sent documents showing that a $5,000 to $24,999 investment paid 7.1 percent interest and that the rates went up as more money was invested. A $100,000 investment returned 8.31 percent interest.
The SEC complaint seemed to indicate that no one yet has lost any money.
“Since January 2007, Gen- See and Piccoli have received more than $16 million and also during that period they paid out approximately the same amount,” the complaint states.
Postal inspectors and the SEC said they want to hear from Piccoli’s investors in the hope of returning leftover funds.
Ray Williams of the Postal Inspection Service asked them to call a federal hotline, (716) 853-5344. “We want to talk to as many investors as possible to further investigate the case and, hopefully, to try and help them get their money back,” Williams said.
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