Long Island Man Ran Ponzi Scheme For More Than 18 Years: Feds

A 58-year-old Long Island man ran a Ponzi scheme for more than 18 years, bilking elderly victims out of more than $8 million, federal prosecutors said Wednesday.

Steven Pagartanis, already facing charges in Suffolk County for his alleged scheme, was arrested on Wednesday and arraigned before United States Magistrate Judge Arlene R. Lindsay in Central Islip.

A nine-count indictment accuses Pagartanis, a formerly licensed financial advisor and affiliate of a registered broker-dealer, with securities fraud, mail and wire fraud conspiracies, as well as money laundering.

According to the indictment and other court documents, from January 2000 to March 2018, Pagartanis solicited elderly victims to invest in real estate-related investments, including those affiliated with a publicly traded Canadian company, authorities said.

Pagartanis promised the victims that their principal would be secure and earn a fixed return, which he typically claimed to be between 4.5 to 8 percent annually, authorities said.

At Pagartanis's direction, prosecutors said victims wrote checks payable to an entity that was secretly controlled by Pagartanis.

Pagartanis allegedly used a network of bank accounts to launder the stolen funds, which he then used to pay personal expenses, buy luxury items and make the guaranteed “interest” or “dividend” payments to other victims.

In all, the victims invested over $13 million and sustained actual losses of over $8 million and many lost substantial portions of their life savings as a result of the scheme, prosecutors said.

“As alleged, Pagartanis conned vulnerable members of the community who had entrusted him with their hard-earned savings,” Richard Donoghue, United States Attorney for the Eastern District of New

York, said. “Protecting the elderly and the community at large from predators like the defendant is a priority of this Office and the Department of Justice and with our law enforcement partners we will continue to pursue that mission.”

If convicted, Pagartanis faces a maximum sentence of 20 years in prison.