A West Roxbury family on Tuesday admitted guilt in a $10 million Ponzi scheme that funded a lavish lifestyle of gambling, adultery and luxury.
Steven Palladino, 57, his wife Lori Palladino, 53, and the couple's son Gregory Palladino, 28, pleaded guilty in Suffolk Superior Court to orchestrating the elaborate scheme, which began in 2007 when the family began operating the Viking Financial Group.
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"Well over $10 million dollars were lost to this scam, but how do you put a price tag on your parents' retirement account or your children's college fund? The true cost is incalculable," District Attorney Daniel F. Conley said of the crimes.
“This massive loss is bad enough, but it’s made even worse by what the investments were spent on: gambling debts, luxury vacations, top-of-the line cars, five-star restaurants and Steven Palladino’s mistresses. There was no legitimate business; it was an out-and-out scam perpetrated by Steven Palladino and abetted by his wife and son.”
Steven, who Judge Janet Sanders referred to as the "primary beneficiary" of the crimes, was sentenced to 10 years in prison, while his wife received a suspended 2-year sentence. Gregory will serve two years. All three were ordered to pay restitution.
Investigators claim investors were conned into believing their money would be used to make high-interest loans, but instead, the Palladinos transferred the funds into their personal accounts.
Prosecutors alleged that fake loans were entered into Viking’s corporate books in order to make them appear balanced and the company appear profitable. Of the few real loans Viking extended, several charged interest rates well beyond the 20 percent maximum allowed under state law.
The defendants are accused of concealing the theft of funds by using new investments to make regular interest payments to investors, and in some cases repay the principal.
Investigators say the funds were used to pay for luxury vehicles, a vacation to the Bahamas, rent for Steven Palladino’s mistress, and casino trips resulting in hundreds of thousands of dollars in losses.
Steven Palladino’s dealings with one casino chain were so extensive that the casino flew him, Gregory and others to Atlantic City on a private jet, according to Conley.