Steven Pagartanis, an ex-New York broker with Lombard Securities, has pleaded guilty to wire fraud and mail fraud in a Ponzi scam that went on for more than 18 years and caused investors to lose more than $9M of the over $13M that they invested. Many of his victims were older investors who lost a significant amount of their life savings. Many of them had worked with Pagartanis for years.
According to the release by the US Attorney’s Office for the Eastern District of New York, from 1/2000 to 3/2018, Pagartanis persuaded older individuals to get involved in investments involving real estate, including those that had affiliations with an international hotel conglomerate and publicly traded entities. Investors were told that their principal was secure and they would make a fixed return of 4.5 to 8% yearly.
Pagartanis’ victims were instructed to write checks to an entity of which he was secretly in control. The former broker used different bank accounts to launder the stolen money that he then spent on his own expenses as well as to pay other investors their “interest or dividend payments” that they were owed. He set up bogus account statements so as to encourage further investing and to hide his fraud.
Now, Pagartanis could be facing up to 20 years in prison. He is also the subject of a parallel civil fraud cause brought by the US Securities and Exchange Commission.
Until earlier this year, Pagartanis was a registered broker with Lombard Securities. He was barred by the Financial Industry Regulatory Authority (FINRA) in April after he refused to testify in the self-regulatory authority’s probe into the fraud and misappropriation allegations against him. He agreed to the sanction and accepted the entry of findings but did not admit to or deny them.
According to his BrokerCheck record, Pagartanis, who has nearly three decades in the industry, also was previously registered with:
- Cadaret, Grant & Co.
- Woodbury Financial Services
- Invest Financial Corp.
- Yankee Financial Group, which FINRA expelled in 2006
- Park Avenue Securities
- Guardian Investor Services
- Tower Square Securities
- John Hancock Distributors
- John Hancock Mutual Life Insurance Company
- Pruco Securities
- The Prudential Insurance Company of America
Pagartanis’s record shows 14 disclosures, including nine customer disputes that are still pending and two that were settled for $97K and $80K, respectively. Allegations against Pagartanis in the securities arbitration cases include:
- Unsuitable investments
- Requests to customers that they issue checks to a company that was not approved by his brokerage firm
- Selling away
- Selling unapproved investments
- Using proceeds for his own expenses
At Shepherd Smith Edwards and Kantas, LLP (SSEK Law Firm) our senior investor fraud attorneys represent older investors, their families, and others that have lost money due to fraud. If you are someone who invested your money through Pagartanis, do not hesitate to contact our investor fraud law firm today so that we can help you determine whether you may have grounds for a securities claim.