A Bergen County father and son admitted they conned mostly elderly investors out of $3 million – after getting caught earlier scamming the very same people and others out of $5.5 million.
George Bussanich Sr. and his son “ruthlessly stole the life savings of elderly investors to bankroll their own expensive homes, high-end cars, and luxury dining and travel,” state Attorney General Gurbir S. Grewal said.
George Bussanich Jr., for example, bought a house in Upper Saddle River worth nearly $1 million.
“What makes this case even more egregious is that they defrauded many of the same elderly retirees a second time after the first scheme was exposed, playing on their desperation to recover their lost savings,” the attorney general added.
George Bussanich Sr., 60, of Park Ridge, will be sentenced to 10 years in state prison under a plea deal with state prosecutors.
George Bussanich Jr., 39 – who solicited investor funds with his father and mother, Wilma – will get eight years behind bars under his deal.
Both pleaded guilty to fraud-related charges, as well as money laundering, in Superior Court in Hackensack on Monday.
In addition, Wilma Bussanich, 58, pleaded guilty to money laundering in exchange for probation.
All three are scheduled to be sentenced on June 28.
After defrauding 26 investors in the first scam, the father and son agreed to pay $5.5 million, including $4 million in investor restitution, to settle a suit filed by the New Jersey Bureau of Securities.
A month later, they defrauded 15 of the same investors of $3 million in a second scam, Grewal said.
Victims included a recently-widowed elderly woman who needed help managing her financial affairs and, instead, had $500,000 drained from her savings.
The Bussaniches are jointly and separately liable for full restitution to the victims, Grewal said.
So are four others who previously pleaded guilty in connection with the case and will receive probation: attorney Bryan Nazor, 47, of Chestnut Ridge; Heidi Francavilla, 60, of Park Ridge; accountant Robert Schooley, 67, of Park Ridge and Christopher Hanna, 37, of Parlin.
All agreed to forfeit all assets seized in the investigation, the attorney general said.
The state Division of Criminal Justice obtained court orders placing liens on:
- the home of George Bussanich Jr. in Upper Saddle River;
- two homes in Park Ridge and Emerson owned by a limited liability company controlled by Bussanich Sr. that are valued at a total of approximately $1 million;
- several bank and brokerage accounts controlled by members of what was called "the Bussanich enterprise."
The original $5.5 million settlement obtained in August 2014 resolved a lawsuit that alleged that from May 2009 to July 2013, George Bussanich Sr. and George Jr. misled investors in the sale of unregistered investment notes in Metropolitan Ambulatory Surgical Center, LLC (MASC).
The state Bureau of Securities found that the Bussaniches defrauded 26 investors of more than $4 million, which became part of a criminal investigation.
Despite its name, MASC was not an actual surgical center but simply a holding company controlled by Bussanich Sr., state authorities said.
The Bussaniches, including Wilma, allegedly made dividend payments to investors out of the initial principal funds – essentially deceiving investors into believing their investments were generating profits, they said.
Meanwhile, they diverted investor funds to buy several homes and seven luxury cars – including two Maserati Quattroportes, a Ferrari F430 Spider and a Mercedes ML350 – and to pay for lavish shopping, dining, travel and entertainment bills, Grewal said.
The 2014 consent order barred Bussanich Sr. and his son from the securities industry in New Jersey, prohibiting them from selling securities and from controlling or acting as officers or directors of any entity that sells securities.
However, investigators from the state Division of Criminal Justice found that, beginning the very next month, the Bussaniches "began soliciting investments in a fictitious company called Global Fund Management that they created with Schooley, who was an accountant for the family,” the attorney general said.
"Between September 2014 and September 2015, a total of 15 of the original 26 investors invested just over $3 million in the purported business venture," Grewal said. "Once again, the defendants fraudulently diverted most of the investor funds for their personal use."
The investments were transferred to bank accounts controlled by the defendants, most of which were registered under the names of limited liability companies that were set up by Nazor as attorney for the Bussaniches, a state grand jury indictment charged.
The majority of the companies didn't operate as legitimate businesses, and the bank accounts associated with the shell companies "were used primarily to launder the investor money and avoid the strictures of the consent order," Grewal said.
The defendants "used Nazor’s attorney trust account to launder investor money and to provide investors with the false belief that the investments were legitimate and safe because they were being conducted through an attorney," he said.
The investors received monthly “returns,” paid out of the original principal investment, which "gave them the impression that the investments were legitimate and were profiting," he added.
However, the defendants were simply moving money from one account to another and then disbursing a "fraction of the funds" back to the investors as a “return,” the attorney general said.
They also used new investor funds to make penalty payments required under the consent order, he said.
Most of the investment money went to making down payments and mortgage payments on various properties, paying restaurant bills and financing vacations, among other personal uses, the father and son admitted Monday.
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