A.G. SCHNEIDERMAN ANNOUNCES TWO INDICTMENTS CHARGING PREVIOUSLY-CONVICTED INVESTMENT FRAUDSTER WITH ALLEGED SCHEME TO STEAL OVER $270,000 AND EVADE RESTITUTION PAYMENTS TO PRIOR VICTIMS
Former Stockbroker Franklin S. Marone Allegedly Stole Over $270,000 From His Mother and Other Victims, While Concealing The Stolen Funds From the Court To Avoid Refunding His Prior Fraud Victims
If Convicted of these New Charges, Marone Faces Up To 20 Years In State Prison
NEW YORK —Attorney General Eric T. Schneiderman today announced the unsealing of two indictments charging Franklin S. Marone, 55, of Queens, NY with allegedly stealing over $270,000 from multiple victims, including his 88-year-old mother, and then filing fraudulent financial disclosures to conceal the stolen funds – all in order to avoid paying court-ordered restitution to the victims of his prior investment fraud scheme. The indictments, filed in Queens County and Greene County, charge Marone with Grand Larceny, Identity Theft, Scheme to Defraud, Criminal Impersonation, Offering a False Instrument for Filing, and Perjury. If convicted, the defendant faces up to 20 years in state prison.
“As we allege, the defendant in this case brazenly stole from those closest to him, showing no remorse for his prior victims and completely disregarding the law,” said Attorney General Schneiderman. “No matter how covert or complex the scheme, my office will continue to work with our law enforcement partners to root out investment fraud and protect New Yorkers from financial exploitation.”
According to statements made by prosecutors and documents filed with the courts, in June 2004, Marone was convicted in Greene County Court of two counts of Grand Larceny in the First Degree, a class "B" felony, and one count of Scheme to Defraud in the First Degree, a class "E" felony, for perpetrating a massive investment fraud scheme. Between November 1998 and January 2004, Marone, a former stockbroker, targeted his fellow members of the ski patrol at a Catskill mountain resort and fraudulently solicited them to invest over $5.4 million in a series of fictitious equity funds that he dubbed "Patrollers Capital Funds." In furtherance of his scheme, Marone created fraudulent stock certificates, prepared phony account statements, and sent e-mails to his victims touting the performance of the phony funds. In reality, all of the investors’ money was deposited directly into Marone’s personal accounts. After pleading guilty, Marone was sentenced to 6 to 18 years in state prison and ordered to pay over $4.6 million in restitution to his victims.
Although he still owes $1.2 million to the victims of his securities fraud scheme, Marone began missing court-ordered restitution payments beginning in early 2014. After his continued failure to make timely payments, the Honorable Terry Wilhelm of Green County Court ordered a restitution hearing and directed Marone to complete financial disclosure affidavits. In July and August 2017, Marone filed two sworn affidavits with the Court, attesting that he had no assets or income.
However, an investigation conducted by the Attorney General’s Criminal Enforcement and Financial Crimes Bureau and the New York State Police Financial Crimes Unit revealed that, contrary to the statements Marone filed with the court, Marone allegedly stole over $270,000 from multiple victims, including his 88-year-old mother, between January 2014 and September 2017. Prosecutors allege Marone stole over $100,000 cash from his mother, and on four separate occasions sold thousands of dollars of her valuables at a local pawnshop. Moreover, between May and June 2016, Marone allegedly impersonated his mother in a series of recorded phone calls with a financial institution, in an attempt to steal over $50,000 from her account. Marone also allegedly targeted an ex-girlfriend and a family friend and stole over $45,000 from them. Marone allegedly used the stolen monies to pay for over $40,000 in upgrades to his Jeep Wrangler, multiple Caribbean cruises, and thousands of dollars in premium gym memberships for himself, his current girlfriend, and their respective families.
In Greene County, Marone is charged with two counts of Offering a False Instrument for Filing in the First Degree, a class “E” felony, and two counts of Perjury in the Third Degree, a class “A” misdemeanor. Marone was arraigned January 12, 2018 in Greene County Court before the Honorable Terry J. Wilhelm, and was remanded to the custody of the Greene County Sheriff in lieu of a $100,000 cash or $250,000 bond. Marone is next due in Greene County Court on February 20, 2018.
In Queens County, Marone is charged with one count of Grand Larceny in the Second Degree, a class “C” felony; one count of Grand Larceny in the Third Degree, a class “D” felony; two counts of Identity Theft in the First Degree, a class “D” felony; one count of Scheme to Defraud in the First Degree, a class “E” felony; and one count of Criminal Impersonation in the Second Degree, a class “A” misdemeanor. Marone was arraigned on January 18, 2018 in Queens Supreme Court before the Honorable Peter F. Vallone, Jr., and bail was set at $500,000 cash or $1 million bond. Marone is next due in Queens Supreme Court on February 8, 2018.
In addition to the two pending indictments in Greene and Queens Counties, Marone is scheduled to appear in Greene County Court for a hearing related to his $1.2 million in outstanding court-ordered restitution from his prior conviction on March 1, 2018.
Attorney General Schneiderman would like to thank the New York State Police Financial Crimes Unit for its valuable assistance in this investigation.
The case is being prosecuted by Assistant Attorney General Philip V. Apruzzese of the Attorney General’s Criminal Enforcement and Financial Crimes Bureau, with the assistance of Legal Support Analyst Rebecca Jacobson. The Criminal Enforcement and Financial Crimes Bureau is led by Bureau Chief Stephanie Swenton and Deputy Bureau Chief Joseph D’Arrigo. The Division of Criminal Justice is led by Executive Deputy Attorney General Margaret Garnett.
The OAG investigation was conducted by Investigator Mark Spencer, under the supervision of Deputy Bureau Chief Antoine Karam. The Investigations Division is led by Chief Investigator Dominick Zarrella. Audit work was performed by Auditor Investigator Marcos Perez of the Forensic Audit Section. The Forensic Audit Section is led by Deputy Chief Sandy Bizzarro and Chief Edward J. Keegan.
The charges are merely accusations and the defendant is presumed innocent unless and until proven guilty in a court of law.