2002-06-03 -- Aliotta, Anthony -- Sentencing -- News Release

Monmouth County CPA Sentenced to 46 Months for Ponzi Scheme that Ripped Off Investors Here and Abroad

TRENTON - The founder of a Long Branch accounting firm was sentenced today to 46 months in prison and ordered to make $4.2 million in restitution for his role in a massive international Ponzi scheme which bilked victims here and in Europe of more than $6 million, U.S. Attorney Christopher J. Christie announced.

Anthony Aliotta, 68, of North Long Branch, a certified public accountant and founding partner of the Aliotta Fritsch and Walsh, accounting firm, formerly of West Long Branch, pleaded guilty on Nov. 8 to conspiracy to commit securities, mail, and wire fraud as well as mail and wire fraud.

During his plea allocution before U.S. District Judge Garrett E. Brown Jr., Aliotta admitted that he promoted and sold shares in the Capital Enhancement Program (C.E.P.), a fraudulent investment program which claimed to trade in various financial instruments described as Prime Bank Notes, Capital Market Instruments, Letters of Credit, Bank Instruments of Guarantee, Bank Notes and foreign currencies, according to Michael A. Guadagno, the Assistant U.S. Attorney who prosecuted the case.

Aliotta further admitted that investment contracts in C.E.P. were sold to individuals in $100,000 lots with assurances that they were backed by United States Treasury bills equal to 110 percent of the investor's deposit. Early investors in C.E.P. received distributions which they were told were profits from the C.E.P. In reality, Aliotta admitted, none of the over $6 million invested in C.E.P. was ever traded and any distributions made to investors were made from funds supplied by later investors - a classic Ponzi scheme.

In sentencing Aliotta, Judge Brown said that this was a "particularly odious and reprehensible scheme." Judge Brown also said that Aliotta's crime generated a "massive amount of money through an abuse of trust." Although Aliotta sought a downward departure because of his age and his wife's poor health, Judge Brown identified some of the victims who were also elderly including P.S. who was 91 and suffered a loss of $175,000 and who now relies on $20,000 per year in social security benefits.

Judge Brown allowed Aliotta to self-surrender to an institution to be designated by the Bureau of Prisons.

Christie credited Postal Inspectors, under the direction of Kevin J. Burke, Postal Inspector in Charge of the Postal Inspection Service in Newark, with developing the case against Aliotta.

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Defense Counsel: Lorraine Gauli-Rufo, Esq.

Federal Public Defenders Office, Newark