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Victims included a recently-widowed elderly woman who lost $500,000, the indictment says.
George Bussanich Jr., 37, of Saddle River ran the schemes and solicited investors with his George Bussanich Sr., 58, and mother, Wilma, 56, of Park Ridge -- all of whom were named in the indictment.
Most of the investors' funds went to "the personal use and enjoyment of the defendants," authorities said.
George Bussanich Jr., for instance, bought a house in Upper Saddle River worth nearly $1 million, the indictment alleges.
His wife, Cheryl Bussanich, is named in two counts charging the couple with failing a tax return and failing to pay taxes.
Also charged were:
- Wilma Bussanich, 56, of Park Ridge;
- Heidi Francavilla, 58, of Park Ridge;
- Attorney Bryan Nazor, Esq., 45, of Chestnut Ridge, N.Y.;
- Accountant Robert G. Schooley, 65, of Park Ridge;
- Brendan M. Byrne, 45, of Paterson;
- Christopher Hanna, 35, of Parlin.
Charges against but Cheryl Bussanich include conspiracy, racketeering and money laundering for defrauding 26 investors of more than $7 million through two successive scams involving sales of bogus investments, Attorney General Christopher S. Porrino said Friday.
The staste Division of Criminal Justice has 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, and several bank and brokerage accounts controlled by members of what Porrino called "the Bussanich enterprise."
After the first scam, George Bussanich Sr. and George Bussanich Jr. agreed to pay $5.5 million, including $4 million in investor restitution, to settle a suit filed by the New Jersey Bureau of Securities.
They then on to defraud 15 of the same investors in a second scam, Porrino said.
The family "targeted elderly retirees, heartlessly stealing their life savings to pay for expensive homes, fast cars and lavish entertainment for themselves,” Porrino said.
"Even after their first scam was exposed," the attorney general said, they victimized many of the same investors again, "exploiting their desperation and enlisting a lawyer to add an aura of legitimacy.
"We’ll make sure these con artists go to prison and are held accountable for paying back their victims,” he said.
The $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 the criminal investigation that led to Friday's indictment Porrino said.
"Despite its name, MASC was not an actual surgical center but simply a holding company controlled by Bussanich Sr," the attorney general said.
"The Bussaniches, including Wilma, allegedly made dividend payments to investors out of the initial principal funds, thereby deceiving investors into believing their investments were generating profits," he 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," Porrino 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.
"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," the attorney general 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, the indictment charges.
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," Porrino 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."
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," Porrino said.
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 added.
Most of the investment money went to "the personal use and enjoyment of the defendants," Porrino said -- including making down payments and mortgage payments on various properties, paying restaurant bills and financing vacations.
George Bussanich Jr. and Francavilla are charged with theft for allegedly stealing nearly $500,000 from an elderly woman who "needed help managing her financial affairs" after her husband died, Porrino said.
George Jr. had himself named as a power of attorney for her, after which he and Francavilla drained the money -- including $300,000 purportedly “invested” in Global Fund Management as part of the second scheme, the indictment charges.
All of the defendants except Hanna are also charged with misconduct by a corporate official.
In addition, George Sr., George Jr., Wilma Bussanich, Nazor and Schooley are each charged with securities fraud and various counts of theft. Francavilla is also charged with two counts of theft.
The Bussaniches, Francavilla and Schooley also face tax charges.
The indictment is the result of an investigation by the Division of Criminal Justice Gangs & Organized Crime Bureau. George Sr., George Jr., Wilma Bussanich, Francavilla, Schooley and Byrne were initially arrested by the Division of Criminal Justice on Sept. 2, 2015.
Deputy Attorneys General Brandy Malfitano and Amy Simienski presented the indictment to the state grand jury for the Division of Criminal Justice Gangs & Organized Crime Bureau. They were assigned to the investigation with led Detective Matthew Tully.
The Bureau of Securities investigation was led by Chief of Enforcement Rudolph G. Bassman.
A judge in Trenton assigned the case to Hackesnack, where the defendants will be ordered to appear in court for arraignment.
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