Ex-Long Island Investment Advisor Sentenced For Multi-Million Dollar Ponzi Scheme

An investment advisor from Long Island will spend more than a decade behind bars for his role in defrauding his elderly victims in a multimillion-dollar scheme, U.S. Attorney Richard Donoghue announced.

Steven Pagartanis

Steven Pagartanis

Photo Credit: Suffolk County DA

East Setauket resident Steven Pagartanis, 60, was sentenced to a term of 170 months in prison and ordered to pay more than $6.5 million in restitution after pleading guilty in December to conspiracy to commit mail and wire fraud for orchestrating a securities fraud scheme over the course of 18 years.  

“Today’s sentence is a well-deserved reckoning for Pagartanis, who preyed on elderly investors, many of whom trusted him with their life savings, for nearly two decades,” Donoghue said. “Protecting investors, especially those that are vulnerable, from white-collar criminals is a priority of this Office and the Department of Justice.”

Donoghue said that from January 2000 to March 2018, Pagartanis, then an affiliate of a registered broker-dealer, solicited victims, almost all of whom were elderly women, to invest in two publicly traded companies, promising an 8 percent return. 

At Pagartanis’s direction, his victims wrote checks payable to an entity he secretly controlled.  Pagartanis then laundered the victims’ investments through a series of bank accounts, and used the money to pay personal expenses, purchase luxury items, fund failed business ventures - including his wife’s pet store - and make the guaranteed “interest” or “dividend” payments to other victims.  

In total, Pagartanis’s victims invested more than $13 million and sustained losses of over $9 million. Many lost substantial amounts of their life savings, including funds set aside to help ill family members, pay college expenses and maintain their homes, Donoghue noted.

“Steven Pagartanis deceived investors from New York to California with the selfish goal of enriching himself at the expense of innocent elderly victims,” IRS-CI Special Agent-in-Charge Jonathan Larsen added. “We at IRS-CI welcome the opportunity to lend our financial expertise to uncover such callous criminality and protect the innocent from being swindled out of their life savings.”

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