During an 18-year span, an East Setauket financial adviser allegedly scammed 17 people out of more than $13 million, according to a federal indictment.
The United States Attorney’s Office for the Eastern District of New York announced Steven Pagartanis faces nine federal charges.
The 58-year-old owner of Omega Planning Associates, was arrested and arraigned in federal court in Central Islip July 25 and was charged with security fraud, mail and wire fraud conspiracies, as well as money laundering for orchestrating a Ponzi scheme, according to a press release from the EDNY office.
The government alleged Pagartanis solicited individuals to invest in variable annuities, mutual funds and similar investments, according to court documents. At least 17 individuals between January 2000 and March 2018 invested more than $13 million collectively with the defendant. The victims believed the money was for real estate investments, including a Canadian land development company, referred to as Company 1 in court documents. The individuals sustained a loss of more than $8 million. The investors are listed as Jane and John Does in the court documents and live in various areas including Long Island, Illinois, California and Florida.
“Rather than investing in Company 1 and other investments as promised to the victims, the defendant Steven Pagartanis, used the investment capital to repay prior investors and for his own personal benefit,” the release reads. “For example, Pagartanis used the victims’ investment capital to pay for his personal and family expenses, and to purchase luxury items such as clothing, jewelry, airline tickets, massages and cigars.”
The defendant used interstate communications including telephone calls and emails to induce the victims to invest and to prevent them from withdrawing their investments, according to court documents.
“As alleged, Pagartanis conned vulnerable members of the community who had entrusted him with their hard-earned savings,” said Richard Donoghue, U. S. attorney, in a statement. “Protecting the elderly and the community at large from predators like the defendant is a priority of this office and the Department of Justice and with our law enforcement partners we will continue to pursue that mission.”
“As alleged, Pagartanis conned vulnerable members of the community who had entrusted him with their hard-earned savings.”
— Richard Donoghue
Pagartanis was previously arrested May 30 for allegedly stealing millions from elderly victims in a Ponzi scheme, according to a statement from the Suffolk County District Attorney’s office. He was arraigned in Suffolk County District Court in Central Islip on two counts of first-degree grand larceny, a B felony, and two counts of second-degree grand larceny, a C felony. According to the Suffolk County district attorney’s office, Pagartanis allegedly stole approximately $7.5 million from his victims in the county case.
A family member of one of the victims brought the case to the attention of the district attorney’s office. The four victims included in the felony complaints, who range in age from 64 to 83 years old, began investing in the scheme in 2013, according to the statement from Sini’s office.
Pursuant to a concurrent investigation by the Financial Industry Regulatory Authority, Inc., Pagartanis was barred from acting as a securities broker April 10, according to FINRA’s website, brokercheck.finra.org. The site lists customer disputes as well as a judgment/lien against the former broker. In addition to the criminal charges, a civil lawsuit was filed against Pagartanis May 30 by the U.S. Securities and Exchange Commission, according to Sini’s office.
Attorney Kevin Keating of Garden City is representing Pagartanis. The defendant pleaded not guilty. Keating did not respond to a request for comment.