10-07-04 -- Dobbins, Peter -- Guilty Plea -- News Release

Co-Conspirator in $76 Million Investor Fraud Pleads Guilty

NEWARK - A former accountant at Wellesley Services, LLC, the now-defunct company operated by convicted Bergen County con-man Thomas Giacomaro, pleaded guilty today, admitting that he assisted in funneling millions of dollars in investor money to Giacomaro and other co-conspirators while concealing these expenditures in Wellesley's books as purported legitimate "business expenses," U.S. Attorney Christopher J. Christie announced.

Peter Dobbins, 47, of Bardonia, N.Y., told U.S. District Judge John C. Lifland that, at the direction of Wellesley's Chief Financial Officer "A.B.," he routinely signed checks made payable to Giacomaro associate Ross Capawana with the knowledge that the checks would be cashed and the cash provided to Giacomaro as spending money. This was one of the ways Giacomaro hid his involvement in and theft from Wellesley and Windham Associates, while enriching himself and others with millions of dollars of investor funds, according to Assistant U.S. Attorneys Michael F. Buchanan, Luis A. Valentin and Rachael A. Hill.

Dobbins also admitted that he signed company checks that were used to pay Giacomaro's criminal restitution obligation to the United States, imposed as part of Giacomaro's sentence for a prior felony conviction, and to signing checks and authorizing wire transfers that were used to pay the personal credit card bills of Giacomaro and his wife and buy expensive homes for Giacomaro and other members of the scheme. Dobbins admitted that he recorded most of these expenditures in Wellesley's books and records falsely, as purportedly legitimate "business expenses," to assist Giacomaro and the other co-conspirators in concealing this income from the IRS.

Dobbins pleaded guilty to one count of conspiring to defraud the United States, for participating in the scheme to conceal income from the IRS. Dobbins faces a maximum penalty of five years in prison and a $250,000 fine.

The investigation of co-conspirators in the Giacomaro fraud scheme is continuing, and more prosecutions are expected. Judge Lifland scheduled Dobbins' sentencing for Jan. 13.

Giacomaro, 51, was sentenced to 14 years in federal prison on Feb. 13, 2004, and ordered to make $69.29 million in restitution. (See news release on that day at www.njusao.org for a fuller description of the Giacomaro fraud committed with numerous co-conspirators.)

Giacomaro had been in federal prison since February 2002, when he was sentenced for his prior guilty plea to conspiracy to defraud. While awaiting sentencing for those crimes, he committed the frauds for which he was sentenced on February 13, 2004.

On June 6, 2003, Giacomaro pleaded guilty to a three-count, 28-page Information, and gave a detailed admission of his leading role in the pyramid scheme that used Wellesley and Windham and other entities to rob investors. Giacomaro perpetrated the $73 million fraud in violation of the terms of his plea agreement, which required that he not commit any other criminal offenses while he was subject to that agreement.

Between 1995 and 2001, Giacomaro and other co-conspirators established several business entities, including Wellesley Services Inc. and Windham Associates. Giacomaro admitted that he was the defacto owner and president of Wellesley and Windham, but publicly listed co-conspirators K.M. and A.B. as the officers and owners. This, Giacomaro admitted, was to cover up and obscure his role in the companies, in an effort to legitimize the businesses and reel in investors who might otherwise avoid Giacomaro because of his criminal history.

Giacomaro admitted that he and his co-conspirators formed the business entities for the purpose of obtaining investor funds and funneling those funds to himself and his associates.

Giacomaro further admitted that he and his co-conspirators created Marcus Industries, AKB and SRM to divert funds from Wellesley and Windham disguised as consulting fees and to conceal those diversions from investors.

Christie credited Special Agents of the FBI Newark Division, under the direction of Special Agent in Charge Joseph Billy, Jr.; Special Agents of the IRS Criminal Investigation section, under the direction of Special Agent in Charge Patricia J. Haynes; and Inspectors with the U.S. Postal Inspection Service in Newark, under the direction of Postal Inspector in Charge Martin D. Phanco, and the New Jersey Bureau of Securities, under the direction of Bureau Chief Franklin L. Widmann, with developing the case against Giacomaro and his co-conspirators.

-end-

Defense Counsel: Andrew Joseph, Esq.