3 LI men charged in paving stone scheme

Three Long Island men were indicted Thursday on charges they operated a $26 million green-themed Ponzi scheme promising investors sky-high investment returns on the sale of eco-friendly paving stones imported from Australia, officials said.

The trio -- Fredric Aaron, 48, of Plainview; Eric Aronson, 43, of Syosset; and Vincent Buonauro, 40, of West Islip -- were involved in the operation of a company called Permapave Industries from 2006 to 2010 with offices in Jericho and Syosset, according to court papers filed by Eastern District Assistant U.S. Attorney William Campos.

They lured investors to the fraud by offering returns of up to 400 percent on false claims that the company had a backlog of orders, according to court papers. Investors were told that the company "had signed contracts with various municipalities to install Permapave products when, in fact, there were no such contracts for anything other than pilot programs that would produce only immaterial amounts of revenue, the indictment said.

Investors from across the country thought they were loaning money to the company to finance shipments of the Australian paving stones, the government said, which supposedly would allow rain water to filter through to the ground.

Instead, the three used the money provided by some of the 140 investors to pay back earlier investors, while they siphoned off $3 million for personal use, including payments on home mortgages, automobiles, watches, jewelry, clothing, vacations and air travel, officials said.

The three were charged with conspiracy, securities fraud and money laundering.

Buonauro and Aaron pleaded not guilty at arraignment before U.S. Magistrate Gary Brown at federal court in Central Islip and were released. Aronson is scheduled to be arraigned later.

Buonauro's attorney, Mark Gottlieb, of Manhattan, declined to comment. Aaron's attorney, Kevin Keating, of Garden City, said his client was an attorney who had innocently done legal work for the company and should not have been charged. An attorney for Aronson could not immediately be reached.

If convicted, the three each face up to 20 years in prison.

With Gary Dymski

and John Riley