A Family Affair
In what is believed to be a first, criminal charges were brought against a Massachusetts husband, wife and son based on charges the trio operated a Ponzi scheme that duped investors out of at least $10 million. The three later entered into plea agreements with prosecutors, resulting for prison terms for the husband and son and a suspended sentence for the wife.
Viking Financial Group (“Viking”) was owned and operated by Steven Palladino, his wife Lori Palladino, and his son, Greg Palladino. Viking advertised itself as operating a high-yield, low-risk investment strategy that offered above-average returns by making secured loans to borrowers at inflated interest rates. In total, the venture raised over $10 million from at least 40 investors.
However, there were very few legitimate loans, and the Palladinos paid the advertised interest by simply using funds from new investors. Investor funds were diverted for a variety of unauthorized purposes, including trips to the Bahamas, hundreds of thousands of dollars in gambling losses, and even the payment of rent for Steven Palladino’s mistress. Ironically, Steven Palladino was also accused of using investor funds to make court-ordered payments stemming from a previous conviction for defrauding an elderly relative.
Even after the trio accepted guilty pleas from state prosecutors, Steven Palladino recently landed in more trouble when federal prosecutors indicted him on 25 charges of criminal contempt.