East Setauket Resident Sentenced in Ponzi Scheme

East Setauket Resident Sentenced in Ponzi Scheme

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As his former office sits empty on North Country Road in Setauket, former investment adviser Steven Pagartanis will be spending time in jail.

The 60-year-old East Setauket resident appeared in Central Islip’s federal court Jan. 9 where U.S. District Judge Joan Azrack sentenced Pagartanis to 14 years in prison and also ordered him to pay more than $6.5 million in restitution, according to a press release from the U.S. Attorney’s Office for the Eastern District of New York. The former investment adviser was arrested May 30, 2018, and in December of the same year, pleaded guilty to charges of mail and wire fraud for orchestrating a securities fraud scheme for 18 years.

“Today’s sentence is a well-deserved reckoning for Pagartanis, who preyed on elderly investors, many of whom trusted him with their life savings, for nearly two decades,” said U.S. Attorney Richard Donoghue. “Protecting investors, especially those that are vulnerable, from white-collar criminals is a priority of this office and the Department of Justice.” 

According to the press release, from January 2000 to March 2018, Pagartanis targeted elderly women to invest in two publicly traded companies. He requested the victims write checks payable to an entity he secretly controlled. After laundering the investments using a series of bank accounts, he used the money to pay for personal expenses. He also funded failed business ventures that included his wife’s pet store. 

The defendant’s victims invested more than $13 million and sustained losses of over $9 million, according to the EDNY office.

Pagartanis’ attorney Kevin Keating, of Garden City, declined to comment.

Frank Napolitano’s mother, Roseanne Maggio, of Middle Island, lost nearly $70,000 in the scam. Since Maggio died in 2018, Napolitano attended the sentencing along with other victims.

He said he was satisfied with the sentencing and was surprised that the judge ordered Pagartanis to prison immediately. While to his knowledge his mother’s $70,000 is the smallest amount lost by a victim, he said money is relative to everybody.

“Seventy thousand to one person is $3 million to another person,” he said. “It’s really kind of all my mother had in terms of investing.” 

Napolitano said it was crazy to hear of all the luxury items Pagartanis purchased with the money, including vacations and luxury cars, especially since he targeted elderly women, most of whom had recently suffered an illness or death of a family member.

“It breaks your heart,’” he said.

Despite her passing, Maggio’s family will still see some restitution. Her son said his mother had hoped to leave money to her four grandchildren.

“They’re able to see a little something of grandma’s investment so it helps a little bit,” he said.