Parish wants to know how Ponzi scheme could happen

| February 16, 2010

Leaders of St. Barbara Greek Orthodox Church in Orange told parishioners they have hired a forensic accountant to investigate how the man put in charge of the church’s investments managed to possibly defraud them of millions of dollars, sources within the church confirmed.

Church officials held a meeting last week during which they told parishioners that the national accounting firm Dempsey Partners was retained to determine how Gregory P. Loles, 50, of Easton, came to have control over and allegedly embezzle the parish’s money, according to parishioners and a church-issued memo.

Loles was arrested by federal authorities on mail and wire fraud charges in December for allegedly running a Ponzi scheme that could exceed $8 million in investor losses.

Loles, who ran an investment firm called Apeiron Capital Management Inc., became a member of St. Barbara Church in the 1990s and then was elected to the board of the church’s endowment fund. He was later granted the power to make trades without board approval and purported to be successful in his investments. As word of his supposed success spread through the parish, several individuals began trusting Loles with their personal investments, according to court documents.

Loles allegedly admitted to federal investigators that he used investors’ money to finance Farnbacher Loles, his Danbury race car team and repair shop, for personal expenses and fraudulent “interest” payments to investors.

Loles told investigators he gave investors forged statements showing substantial interest payments on bonds he never purchased, according to an arrest warrant affidavit. As the alleged scheme began to unravel just before his arrest, Loles ended up in St. Vincent’s Medical Center in Bridgeport after a suicide attempt, court documents say.

The scheme may have cost the church millions and devastated several members of the parish, draining their savings.

In a memo sent to parishioners, church officials said they have not been able to “completely and satisfactorily” answer all questions and issues pertaining to the alleged fraud. “Much more work needs to be done in determining the scope, timing and extent of the church’s loss,” the memo said.

The church community is eager for answers, too.

“The God-fearing people of this church deserve that answer,” said one parishioner who spoke on the condition of anonymity. “We’re talking about people’s life savings — good, honest hard-working people. It’s sickening.”

St. Barbara’s pastor, the Rev. Peter J. Orfanakos, and the church’s lawyer, Joseph Martini of New Haven, could not be reached for comment.

More victims continue to come forward and Tom Carson, spokesman for the U.S. attorney’s office, encouraged any other potential victims to contact the FBI.

Farnbacher Loles DEBTS

While Loles remains in federal custody pending his March 26 court date, recent bankruptcy filings for all three arms of the Farnbacher Loles car business shine new light into how many people are owed money by Loles’ failed businesses.

In the Chapter 11 filing, Alan A. Lourenco, the Farnbacher Loles business manager, estimates that 100 to 200 creditors are owed a total of $1 million to $10 million. The company has an estimated $500,000 to $1 million in assets.

The list of creditors staking claim to any available assets in one bankruptcy filing included professional race car drivers, at least one doctor, Farnbacher Loles employees, car parts suppliers and other investors.

Lawyers have already accused Loles of engaging in unethical and possibly illegal business practices by taking deposits for custom car orders and never ordering the cars or by promising one car to multiple people.

In a federal lawsuit, a Detroit company accused Loles of passing a bad check and providing a fraudulent wire number for two custom BMW race cars totaling almost $1 million.

Loles stands alone

Thus far only Gregory Loles is charged with criminal wrongdoing in connection with the alleged embezzlement, although his wife, Kalliopi Loles, is implicated in a civil lawsuit pending in state court.

Carson would not comment on whether the federal complaint will be amended to add more victims than the three it lists or if anyone else will face charges.

Kalliopi Loles is listed as the secretary of Apeiron in the state business filing for the company.

But her lawyer, Gary Fischoff of Woodbury, N.Y., vehemently denied she had any knowledge of the alleged scheme.

“There are no facts that link Mrs. Loles to her husband’s actions. She was nothing but the good wife and is in as much as shock as everybody else,” Fisch­off said. “Obviously, the FBI is doing a thorough investigation and the fact that the FBI only charged Mr. Loles speaks for itself.”

Fischoff said his client first learned she was listed as an officer of her husband’s company when attorney Dennis J. Kokenos, who is representing Ignatius and Christina Komninakas, filed a lawsuit.

In the lawsuit, Kokenos alleges that Kalliopi Loles was present when the Komninakases had discussions leading them to invest $175,000 with Loles.

A Superior Court judge, however, denied a motion for prejudgment remedy against Kalliopi Loles. In doing so, the judge ruled there is no probable cause that the Komninakases will win in their suit against Kalliopi Loles, and therefore denied their attempt to attach her property. The house the Loleses shared in Easton was in Kalliopi Loles’ name and was purchased in June 1999 for $1.2 million, according town land records.

“We would think in light of the court’s recent finding that the plaintiff’s counsel will realize they are barking up the wrong tree,” Fischoff said.

 

http://www.nhregister.com/articles/2010/02/16/news/metro/doc4b7a6e4336800619163324.txt

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Category: Church Security

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