NEW YORK (Reuters) - A New Jersey man has pleaded guilty to defrauding clients out of $10.2 million, prosecutors said, after being accused of running an online scam on Craigslist and other websites.
Arthur Piacentini, 50, admitted on Wednesday to one count of conspiracy to commit wire fraud before U.S. District Judge Jose Linares in Newark, New Jersey, U.S. Attorney Paul Fishman said.
The Saddle Brook resident was released on bail pending an August 4 sentencing, where under recommended federal guidelines he could receive a prison term of 97 to 121 months plus a fine. He also agreed to make $10.2 million of restitution to victims.
Investigators including the U.S. Securities and Exchange Commission accused Piacentini and colleague Paul Bultmeyer of diverting money from clients of three companies they ran, despite saying the money was being invested safely.
They said the men diverted money from clients of their Sherbourne Capital Management Ltd and Sherbourne Financial Ltd, to their payroll services company Ameripay LLC, and diverted money from Ameripay clients to cover other obligations.
Fishman said the scheme ran from December 2004 to May 2009, and that the case against Bultmeyer is still pending.
The SEC filed a parallel civil case against the two men last May, and won a freeze of their three companies’ assets.
A lawyer for Piacentini did not immediately return a call seeking comment.
The criminal case is U.S. v. Piacentini, U.S. District Court, District of New Jersey, No. 09-06093.
Reporting by Jonathan Stempel, editing by Matthew Lewis