Suffolk Man Charged In $200M Ponzi Scheme: Feds

BROOKLYN, NY — A Melville man ran a two-year, $200 million Ponzi scheme based on nonexistent wholesale jewelry deals and false promises of inflated returns, the U.S. Justice Department announced Tuesday.

Gregory Altieri, 53, president of LNA Associates, was charged with wire fraud and arrested Tuesday. He pleaded not guilty and was released on $750,000 bond.

Beginning August 2017, Altieri solicited between $75 million and $85 million from more than 80 investors from Queens, Staten Island, Long Island and elsewhere to buy jewelry at "closeout" prices and resell it at a high profit, according to Seth D. DuCharme, acting U.S. attorney for the Eastern District of New York. He promised returns of between 30 percent and 70 percent in a matter of months, officials said. Altieri initially bought some jewelry with investors' money and around May 2018 began using new investor money to pay earlier investors, telling the early investors they were receiving returns on their investments, prosecutors said.

Altieri then used these purported returns to convince the earlier investors to keep their money with LNA Associates by rolling over their investments into new investments based on false promises to use that money to buy more jewelry, officials said. Altieri stopped making paybacks to investors by January 2020, and owed them about $200 million based on the falsely inflated promised returns, DuCharme said.

"Altieri defrauded investors, including retirees living off their pensions, by representing that he was buying and reselling jewelry for big profits, which was a lie," DuCharme said in a statement. "This Office is committed to protecting the investing public from con artists who would prey upon our community."

If convicted, he faces up to 20 years in prison.

"Stealing millions based on false promises made to retirees who rely on their pensions is contemptible," said William F. Sweeney, Jr., assistant director-in-charge of the FBI's New York field office. "We allege Mr. Altieri knew he was going to have problems paying off his first round of investors, but he kept his con going anyway. As a result of his actions, the FBI has provided him with stainless steel jewelry for his wrists today, and a guarantee of working to hold him and others who commit similar frauds accountable for their behavior."

Altieri's defense attorney is Edward Sapone.