A former Monmouth County fire chief and his wife took money from investors and put some of it toward the purchase of seven homes, authorities said.
Now that Middletown couple, along with their son, must pay $6.7 million in restitution to defrauded investors, many of whom were firefighters and police officers, according to the state.
Vincent P. Falci and his wife, Donna Falci, both of Middletown, and their son, Vincent N. Falci, of Wall, and various investment companies that the father created and operated, together must pay the restitution following legal action brought by the New Jersey Bureau of Securities, according to a news release from the state Attorney General’s Office.
The elder Falci, a former fire chief, was also assessed $800,000 in civil penalties, but if all of the terms of the consent order and final judgment are met, $217,500 of that fine will be suspended, authorities said.
Vincent P. Falci is also permanently banned from working in the securities industry in New Jersey, the news release said.
“This judgment is a significant result for those investors who received false promises and invested in the Falci-controlled companies,” state Attorney General John J. Hoffman said in a prepared statement. “Funds that were originally diverted for personal use will now be returned back to investors and Vincent P. Falci will no longer be working in New Jersey’s securities industry as a result of the work of the Bureau of Securities.”
According to the news release:
Vincent P. Falci and his companies committed multiple violations of the State’s Uniform Securities Law. Among them:
“Falci – an unregistered agent – and his companies made false and misleading statements to 182 investors in connection with the sale of unregistered securities.”
“Specifically, Falci created and provided investors with annual updates that purported to show that their money had primarily been invested in tax certificates as promised.”
But only three percent of that money was invested in tax lien certificates. Much of it was used to toward purchases, including the seven homes owned by the elder Falci and his wife.
“This case illustrates the importance of performing due diligence,” Steve Lee, Acting Director of the State Division of Consumer Affairs, said in a prepared statement. “Unregistered persons or unregistered securities should raise a red flag for investors, and investors need to follow up by contacting the Bureau of Securities.”
The father also promised investors a 7 percent return rate, based on fake, prior-year results.
“To attract investors to his fraudulent scheme – many of whom were firefighters and police officers – Falci promised a high rate of return. Any guarantee of investment results should be viewed with skepticism, especially in a low interest rate environment where lower rates of return are the norm,” Laura H. Posner, Chief of the Bureau of Securities, said in a prepared statement.
The companies and funds the elder Falci created and controlled include Saber Funds LLC; Saber Funds Distributors, LLC; Saber Asset Management, LLC; Fixed Term Government Fund, LLC; MSI Fund I, LLC; MSI Fund II, LLC; BWX Fund, LLC; Preferred Income Portfolio, I; Phoenix Equities, LLC; and Hallus Realty Group, LLC.
Donna Falci was a part owner of Saber Asset Management, LLC and Saber Funds, LLC.
Their son Vincent N. Falci was a part owner of Hallus Realty Group, LLC and Phoenix Equities, LLC.
Rudolph G. Bassman, Chief of Enforcement, conducted the investigation on behalf of the bureau and Amy G. Kopleton, Deputy Bureau Chief, oversaw the prosecution of this matter.
Deputy Attorneys General Victoria A. Manning and Isabella T. Stempler of the Securities Fraud Prosecution Section in the Division of Law represented the Bureau of Securities in the matter.
Get more local news delivered straight to your inbox. Sign up for free Patch newsletters and alerts.
