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Long Island jeweler busted by feds in $200 million Ponzi scheme

2020-07-15

This jeweler had a different way to make his gold.

A Long Island jewelry business owner allegedly snookered investors - including retired cops and firefighters - out of $200 million in an elaborate Ponzi scheme promising big profits from what turned out to be fake sales, federal prosecutors said Tuesday.

Gregory Altieri, the 53-year-old president of LNA Associates, was arrested Tuesday and charged with wire fraud for a scam that spanned two years. He was arraigned via video conference by federal prosecutors in Brooklyn.

According to prosecutors, starting in August 2017, Altieri raised $75 million to $85 million from investors in Queens, Staten Island, Long Island and elsewhere to buy jewelry at low prices and resell at high prices.

“The Alleged Debtor would solicit people, mainly firefighters, policeman and first responders, and encourage them to purchase lots of jewelry in exchange for favorable returns at a future date and time,” according to documents filed in federal bankruptcy court.

An alleged accomplice in the scheme, the bankruptcy records show, was retired police officer and Bethpage Fire Department volunteer Dale Schultz, who vouched to former first responders that the investments were legitimate.

Altieri and Schultz allegedly told the investors via text message, “The money is flowing ... You should get in more ... Even my mother is in these deals.”

In return, Altieri pledged returns on investment of 30% to 70% in a few months. Initially, he bought some jewelry with the money he raised, authorities said. But in May 2018, he began paying the old investors with money from new ones, while claiming the cash came from earnings on their investment.

In September 2019, Altieri’s communications to investors slowed, the bankruptcy records show. And just before Christmas, he threw a dinner at Calogero’s Restaurant in Garden City to calm some 150 investors who’d begun balking at sinking any more money into investments.

One of Altieri’s alleged targets, Robert McDermott, wrote in an affidavit that his family firm invested heavily in the jewelry operation. When the McDermotts sought their money back in 2019, they were repeatedly delayed.

“He paid for the entire dinner,” McDermott wrote in the affidavit. “He provided comforting language that all the money was safe and secure. This was attended by many firemen, police officers and first responders.”

Altieri even used the coronavirus pandemic and the closure of the courts as an excuse to squirrel out of paying his debts, the bankruptcy filing shows. He then convinced the investors to keep their money in the operation.

In January, the scheme began to crumble. He sent out $74 million in checks, but most of those bounced, the bankruptcy filing shows. Altieri, who lives in Melville, N.Y., allegedly stopped paying investors, and ultimately owed them the $200 million in total.

“As alleged, Altieri defrauded investors, including retirees living off their pensions, by representing that he was buying and reselling jewelry for big profits, which was a lie,” Acting United States Attorney Seth DuCharme said.

William Sweeney, assistant director of FBI-New York, said Altieri knew he couldn’t keep up with the payments to his original investors. “Stealing millions based on false promises made to retirees who rely on their pensions is contemptible,” Sweeney said.

Altieri faces 20 years in prison.