North Kingstown Man Admits To Elaborate Fraud Scheme To Protect Business, Florida Home

NORTH KINGSTOWN, RI — A North Kingstown man, working as a self-employed contractor, admitted to a federal judge Wednesday that he executed several illegal financial schemes to protect a $1.5 million Florida home he owned but paid no mortgage payments on.

Ernest Ricci, 62, admitted those schemes involved fraudulently applying for COVID-19 relief from the federal Small Business Administration and money laundering. He pleaded guilty to bankruptcy fraud, obstruction, suborning perjury, wire fraud, and money laundering.

At U.S. District Court in Providence, Ricci admitted that in October 2017, he was going to file for bankruptcy to protect a $1.5 million dollar home in Florida that he and his wife used as both rental property and a vacation home. Prosecutors said Ricci had not made mortgage payments on the home for roughly five years.

But before filing for Chapter 7 bankruptcy, Ricci transferred all his business assets, Premier Home Restoration LLC, to his wife. Ricci admitted he then falsely submitted documents to the bankruptcy court, under oath, indicating he had been unemployed for many years, he had no income, he garnered no compensation of any kind from his wife’s company, he controlled no bank accounts, and he had no assets or properties other than the Florida home.

Ricci also admitted he controlled Premier after transferring the company to his wife. He continued to run its day-to-day operations and used company income to maintain his lifestyle, all of which he failed to disclose to the bankruptcy court, prosecutors said.

Additionally, Ricci also admitted he failed his full rental income from his Florida property and from another property he owned in New Hampshire. Ricci also admitted he lied when he said he held a $200,000 mortgage in the name of another person for the New Hampshire property when, in fact, he owned the property, was collecting rent, and convinced that person to commit perjury before the bankruptcy trustee.

After the bankruptcy trustee was declared the owner of Premier, Ricci fraudulently applied for COVID-related Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL) from the federal Small Business Administration, supposedly to pay Premier employees and company expenses. When filing, Ricci failed to disclose that the trustee was the owner of Premier, and that he and the company were involved in bankruptcy proceedings, according to prosecutors.

After fraudulently obtaining the EDIL and PPP funds, Ricci admitted he engaged in money laundering by conducting a series of financial transactions to conceal the location, ownership, and control of the COVID-19 support payments. Prosecutors said Ricci then used the money to buy rental property in Warwick in another person's name.

Court documents detail a number of stalling tactics, frivolous pleadings, and fraudulent claims by Ricci, including claims he was poor, during the years-long bankruptcy proceedings. Documents also detail numerous combative communications sent by Ricci to the bankruptcy trustee, some laced with profanities.

Ricci is scheduled to be sentenced on Feb. 22, 2024.

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