FOCUS: Victims of scams
Piccoli had friend sign a new will in the hospital
Ralph Sigl had plenty of reasons to drink. When alcoholism finally killed him in 1996, his family was saddened but not surprised.
He found the body of a close friend in the Merchant Marines hanging in their ship’s cabin. His wife killed their toddler son with a butcher knife in 1970. He discovered his sister’s murdered body in 1984 in a Richmond Avenue apartment building he owned.
But the last tragedy of Sigl’s life, according to his family, was becoming a friend of Richard S. Piccoli, the 82-year-old Amherst man now accused of running a multimillion-dollar Ponzi scheme.
Piccoli, court records show, got control of Sigl’s finances and invested more than $600,000 of Sigl’s life savings in Gen-See Capital. The family says it has little hope of ever recovering the money. Sigl made his fortune by buying apartment buildings.
More than just a hard-luck story like the priests and religious orders that prosecutors say may have lost millions to Piccoli, Sigl’s saga includes two warnings to authorities that might have stopped Piccoli in the 1990s.
The first came in 1993 from Sigl himself, when he had lawyer Michael J. Stachowski write to the Internal Revenue Service on his behalf to say that Piccoli was cheating on corporate taxes.
Recent investors said nothing had changed, that Piccoli told him their investments were tax-free and never gave them required tax forms.
And the second warning came in 1998, when former IRS lawyer Thomas J. Sciolino told a State Supreme Court justice in a court-ordered audit that Piccoli was running an illegal Ponzi scheme.
There is no record that either warning was heeded.
It was only two weeks ago that Piccoli was arrested in his Williamsville office and charged with running a Ponzi scheme, or using his latest investors to pay off his earlier ones.
Constance Sigl Reid, Ralph Sigl’s fraternal twin, is now 87 and living in Florida. She said she was not surprised by Piccoli’s arrest.
“I suspected Mr. Piccoli right from the beginning,” she said. “I used to tell Ralph that, and Ralph would say, ‘Aw, he’s a good guy.’ ”
“He’d go to his office, and he’d talk to him,” Reid said of the meetings between her brother and Piccoli at his Delaware Avenue office. “He had a shelf in his office with several bottles of liquor, and Ralph always went and had a couple drinks. I said he’s just giving you drinks so you’ll sign whatever he wants. I didn’t trust him at all.”
The story of Ralph Sigl and Richard Piccoli is contained in the files of the Erie County Surrogate’s Court. And it’s also found in State Supreme Court, where Sigl was declared incompetent in 1991 because of his alcoholism, and a conservator was appointed to conduct his affairs.
Neither court, the record shows, protected Sigl or his assets.
The Sigl family is among the hundreds of Piccoli investors waiting for their money. Prosecutors and attorneys for the Securities and Exchange Commission say it could be a long wait and hold out little hope that all the investments will be repaid.
“I don’t care about the money that much,” Reid said from her Florida home, “but that man shouldn’t be allowed to bilk all these people.”
Another side of story?
Joel L. Daniels, an attorney defending Piccoli on a mail fraud charge related to the alleged Ponzi scheme, was told of the Sigl allegations last week.
“We were unaware of this, but we will look into it, as we will with everything here,” Daniels said of his defense of Piccoli with attorney Richard T. Sullivan. “We’ll go through it all.”
Sullivan said Daniels met with Piccoli Friday and said there is another side to the story.
“They were very, very close friends,” he said of Sigl and Piccoli. “Richard was the only person who really cared for this guy. He took him to hospital visits, took him to crisis centers, came and cleaned his house. He did everything he possibly could to help the guy, and according to him, the brother and the sister were of no assistance whatsoever.”
Constance Reid denies that, and Richard Sigl, Ralph Sigl’s brother, is dead.
Daniels and Sullivan told reporters last week that Piccoli’s only concern is making sure his investors get their money.
The News earlier reported that Piccoli was convicted of leaving the scene of a 1975 accident on the Kensington Expressway that killed a 31-year-old Buffalo woman and seriously injured her companion.
The Sigl court records show that after Sigl was declared incompetent Oct. 7, 1991, he was hospitalized at the Veterans’ Affairs Medical Center in Buffalo, suffering from acute alcoholism and diabetes.
Piccoli grabbed a bartender, Peter Parisi, from the Knights of Columbus on Delaware Avenue to act as a witness, and went with Sigl’s lawyer to pay him a visit at the hospital.
From his hospital bed, Sigl approved a new will.
The new will, drafted by Sigl’s attorney Donald F. Mc- Kenna, virtually cut off Sigl’s twin sister, Constance Reid. Instead of receiving the bulk of her brother’s estate as in an earlier will, she was given $5,000, the same as other relatives.
The new beneficiary and executor of Sigl’s estate? Richard S. Piccoli.
If Piccoli died, the new will stated Piccoli’s wife, Victoria, would get Sigl’s estate. If they both died, Piccoli’s children would inherit Sigl’s lifetime earnings.
Even Piccoli’s longtime secretary, Kathleen M. “Kitty” Fuoco, was in line to get $10,000, twice the amount that would go to Sigl’s twin sister. And that was also twice as much as the woman that Sigl lived with would receive.
McKenna was asked last week about the will he drafted.
“It was perfectly proper,” McKenna said of the will and his 1991 trip to the hospital.
“I can’t discuss these things for two reasons,” McKenna added. “You have the privilege that lawyers have to follow not to discuss things, and I wouldn’t anyway, because I have no great memory of it.”
McKenna said he was unaware that Sigl lost most of his money to Piccoli.
“I don’t know what Piccoli did with the money,” he said. “It’s not my province, in any event.”
But Piccoli did not wait for Sigl to die to get his money.
He took control of Sigl’s funds through the conservator appointed by the court, according to a later court-ordered forensic audit by Sciolino.
An alert 11 years ago
State Supreme Court Justice Thomas P. Flaherty had appointed a former banker, Henry Falkowski, to serve as Sigl’s conservator to handle his affairs. After Sigl’s death, Flaherty ordered Sciolino to do the audit to close the account.
Sciolino, the former IRS lawyer, said in a 33-page report that Falkowski, despite telling the court he would invest Sigl’s money in safe securities, turned the investments over to Piccoli.
And Piccoli, Sciolino showed, made investment after investment in Gen-See Capital.
Sciolino, as federal prosecutors and the SEC now allege in the current cases against Piccoli, could find no investments that Piccoli made to back up Gen-See Capital.
“I believe this is commonly referred to as a Ponzi scheme,” Sciolino reported to the judge on Feb. 6, 1998.
Eleven years before Piccoli’s arrest, authorities had been alerted that Piccoli was allegedly running a Ponzi scheme, or using money from his latest investors to pay off those who invested with him before.
“Frankly, because of the potential criminal aspects of this matter,” Sciolino wrote, “I was very reluctant to interview Richard Piccoli without the presence of an attorney.”
There is no record that Piccoli was ever investigated further until his recent arrest.
Sciolino also said the record showed what appeared to him “a gross neglect of duty on the part of [Sigl’s court-appointed conservator] Falkowski.”
Falkowski died in 1998. No action against him was taken. Sciolino declined to comment, saying the audit report speaks for itself.
Constance Reid, along with Richard Sigl, Ralph Sigl’s brother and former business partner, filed objections to their brother’s new will in Surrogate’s Court on March 12, 1997.
In his affidavit, Richard Sigl, a former Army intelligence officer who died in 2004, traced his brother’s relationship with Piccoli.
“I believed that Piccoli was after my brother’s money and I felt that my brother, in his damaged mental and physical condition, could be easily influenced by Piccoli,” Richard Sigl told the court.
“Piccoli, while acting as the beneficiary and fiduciary,” Richard Sigl continued, “distributed over $600,000 of my brother’s hard-earned money into Piccoli’s corporation, while the Supreme Court and Surrogate were supposed to be overseeing and protecting the property of this man who had admitted he was not competent to manage his own affairs and who had applied to the court for protection.”
Will ruled invalid
Richard Sigl had taken control of his brother’s funds in the 1980s because of Ralph’s alcoholism.
“Prompted by Piccoli,” Richard Sigl said of his brother, “he hired an attorney to recover the funds.”
Richard Sigl lost the case in 1994, and turned the money over to his brother, only to later discover that Piccoli had put the money in Gen-See Capital.
“Why was my brother driving a 1977 automobile and living in a $15,000 house while Falkowski and Piccoli controlled over $700,000 of his money that was supposed to be used for his benefit?” Richard Sigl asked.
Represented by attorney George Navagh to contest the will, Richard Sigl and his sister, Constance Reid prevailed.
Surrogate Joseph Mattina, on Feb. 25, 1999, declared the will giving everything to Richard Piccoli invalid, ruling it had been made under “undue influence” by Piccoli.
Mattina removed Piccoli as executor, and appointed Richard Sigl, Ralph Sigl’s brother, and John Reid, his nephew, as co-executors.
Constance Reid said she tried calling authorities to file charges against Piccoli, including the New York Attorney General’s office, but never found anyone interested.
Her son, John Reid, lives in Buffalo and is now the sole executor of his uncle’s estate, which partially because of the mess involved with the Piccoli investments, remains open. Reid said the family has been able so far to get back about $80,000 in the estate, a tenth of its original value.
“Poverty should be his penalty, absolute poverty,” John Reid said. “Let happen to him what he did to others.”
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