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Last year, federal regulators fined the New Jersey native $1.2 million and ordered him to repay investors he scammed as the owner and president of a hedge fund firm that did its business online.
Now he’s facing criminal charges of cheating investors of $1.6 million.
While federal authorities were pouring all their energy into prosecuting Bernie Madoff, the Sucaratos of the world continued to quietly con even the savviest investors — same as “Madogg” — into believing they could get double-digit returns in a collapsing market.
Not anymore.
Authorities say Sucarato (left), a former School Board candidate in Old Bridge, pulled what is known as a “Suite Scam,” holding up in a funky flatiron-styled building on Wall Street, where he rented “virtual space” for $100 a month before shifting his base of operations to midtown.
He lied about his bona fides, including that he managed a pair of hedge funds since 1993 that outperformed the market, U.S. Attorney Paul Fishman said.
He also claimed $7.2 billion in assets, with a 10-year compounded return exceeding 1800% — all bogus, Fishman said. And he created a false audit report, purportedly prepared by a major accounting firm, that showed his New York Financial Company (“NYFC”) , with a net worth of nearly $800 million, the U.S. Attorney said.
SucaratoSucarato even provided quarterly statements “in order to maintain the investors’ confidence in their investment with NYFC,” Fishman said. “These statements falsely reported to the investors that their investments were growing in value due to Sucarato’s profitable trading.”
Meanwhile, Sucarato was moving money around bank accounts and pulling out what he wanted when he wanted, for shopping sprees at Macy‘s, Teddy Bear, L.L. Bean, and elsewhere, federal authorities said.
Filched investors couldn’t be blamed for being impressed — at least those who weren’t from out-of-state and managed to pop into his office for an appointment.
Sucarato — who now lives in Somerset County after he and his wife moved from their Old Bridge apartment to live with his in-laws in Westchester — established a high-powered, prestigious headquarters. Or so it seemed.
It was in a spacious suite of offices at 67 Wall Street, an historic revival tower, where receptionists and other services were shared among the tenants.
Take the elevator to the 22nd floor, and there were Sucarato‘s digs, one of dozens shared and rented by lawyers and other financial wheeler-dealers who paid — get this — $100 a month in rent.
Sucarato wasn’t the only tenant who used the building to steal people’s money, according to federal authorities who filed charges against them.
Thus the name: “Suite Scam.”
To keep the scam rolling, Fishman said, Sucarato:
- falsely boasted that he was registered as an investment advisor and portfolio manager;
- padded his educational and professional resume (for instance: He claimed to hold a B.S. in finance and economics, magna cum laude, from NYU — even though he never went to school there;
- listed people as NYFC officers and managers who weren’t; and:
- “otherwise created the false impression that NYFC was a successful, well-established and ‘leading capital management and financial consulting firm…with offices in New York and Chicago,” superior management and a staff of “over 20 experienced traders” when the sum total of manpower was him.
He also moved his “virtual office” from Wall Street to an equally powerful address: 501 Fifth Avenue.
Because he solicited and received investment money, Sucarato acted as a “commodity pool operator” and, as a result, had to be registered with the Commodity Futures Trading Commission (“CFTC”).
Neither he nor the company were, Fishman said.
When some of the investors got wise and demanded their money back, Sucarato sent them rubber checks, federal authorities said.
Sucarato has been in trouble with authorities before, and was fined, as well. But with mega-million grubbers like Madoff in their sights, the feds had little time for the relatively “piddling” cases.
Now that Fishman is the new U.S. Attorney out of Newark — replacing now-Gov. Chris “Public Corruption Buster” Christie — expect to see more of these thieving white-collar clowns brought low.
If convicted of the wire fraud counts, Sucarato could face up to 20 years in prison, under federal sentencing guidelines. Should he accept a plea deal, he’ll still go to prison — although for how much time can’t be computed at this point.
Suffice to say that Fishman would be none too glad to send a loud and clear message with this case. This could launch a campaign to sweep up the creeps who kept their heads down during the Madoff hunt, hoping it would all blow over.
Of course, prison time isn’t the only deterrent: Sucarato, if found guilty, would also be on the hook for a significant amount of fines and restitution — if he were somehow able to pay it, that is.
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