Tuesday May 22 2012
Alleged Folsom Ponzi schemer behind bars again
By: Penne Usher, Telegraph Correspondent
Anthony Vasallo accused of violating release conditions
A Folsom man is in custody on a no-bail hold for violating his pretrial release in connection with a Ponzi scheme where he allegedly bilked investors out of millions of dollars. Anthony Vassallo, 32, had been released from custody in 2009 pending his trial. According to a release from the U.S. Attorney?s Office, Magistrate Judge Gregory G. Hollows revoked Vassallo?s release May 14 based on a violation of the conditions of his release. He was not to have direct or indirect contact with investors. ?This is related to Vassallo?s contact with an investor in EIMT, the business alleged to have been a Ponzi scheme,? the press release states. ?Vassallo contacted the investor in an attempt to have him open a bank account into which $95 million was supposedly to be deposited.? Vassallo was reportedly contacted by a person in England who was one of his fraud victims. The individual assured Vassallo that he could provide $95 million on behalf of Vassallo?s investors. There is no indication the funds were ever delivered. Judge Hollows noted that the condition of release was clear, that the contemplated transaction was rife with indicators of fraud, and that Vassallo could have and should have contacted his attorney to determine how to proceed. Vassallo was indicted on April 15, 2009 for soliciting investors for a ?hedge fund? program. He is suspected of running a highly profitable Ponzi scheme, bilking 150 investors out of millions. Many of the victims were members of his church. He was arrested March 19, 2009, and has pleaded not guilty to all charges. Law enforcement officials have said that Vassallo and others operated Equity Investment Management and Trading Inc. (EIMT) in Folsom, soliciting investors for a ?hedge fund? program. Vassallo reportedly promised investors a rate of return of 3.5 percent per month with little risk of loss, officials said. The criminal complaint alleges that Vassallo and his cohorts used investor?s funds to make ?dividend? payments to other investors and make risky loans without investor knowledge or consent. ?This was a classic Ponzi scheme,? said Internal Revenue Service Criminal Investigation Special Agent Scott O?Briant. One victim of the EIMT Ponzi scheme, who requested the Telegraph not use his full name, said he lost $283,000. Frank S. said he know feels he is a victim a second time, based on the lack of prosecution and the exorbitant costs associated with the investigation by a private firm. Pine Grove Associates, Inc. is the receiver in the EIMT case and has been assigned to investigate EIMT?s investments. To date, Frank said he hasn?t seen a dime returned. ?From my perspective the judicial system isn?t moving fast enough,? he said in a phone interview. ?You have to believe good thing will happen, but Pine Grove is spending hundreds of thousands on an investigation that has yet to return any of our money.? Vassallo?s trial is set for January of 2013. He remains in custody in the Sacramento County Jail.