Cigarette Ponzi Scheme
A New York man was accused of using his position as head of a soccer club to dupe investors out of more than $5 million in a Ponzi scheme that purportedly financed the sale of cigarettes to a Native American Indian reservation. Robert Rocco, 48, was indicted in 2013 on multiple federal fraud charges that could land him behind bars for decades.
Rocco was formerly the president of the Dix Hills Soccer Club, where he enjoyed exclusive access to company bank accounts. In that position, Rocco solicited club members to invest in his company, Limestone Capital Services, which they were told provided wholesale financing of cigarette purchases for a tobacco shop located on the Shinnecock Native American Reservation. In exchange for their investment, Rocco promised investors annual returns ranging from 15% to 18%. In total, over two dozen investors invested at least $5 million.
Several years later, Rocco revealed that a rival Indian tribe had stolen approximately $4 million to $5 million of uninsured cigarette inventory from the reservation, resulting in a total loss to investors. However, according to authorities, these claims were false. Instead, Rocco was accused of operating a Ponzi scheme that used investor funds to pay returns.
Indeed, authorities alleged that Rocco even used his position as club president to withdraw nearly $67,000 from the club’s bank accounts — a move that nearly depleted club coffers if not for the generosity of club benefactors to cover the shortfalls.