Ex-financial adviser sentenced for scheme that stole millions from mostly elderly women

A former Setauket-based financial adviser was sentenced to 170 months in prison Thursday for a scheme that mainly targeted elderly single women, many from Long Island, defrauding them of $9 million over 18 years, according to officials.

In an usual ruling, U.S. District Judge Joan Azrack also ordered Steven Pagartanis, 60, to be immediately remanded to prison, noting that probation officers and prosecutors said he was still not complying with providing them with full financial information, and that he had been receiving food stamps though he was not financially eligible.

Federal marshals escorted Pagatarnis out of the courtroom. White-collar criminals are usually allowed to surrender to a federal prison at a later date.

Azrack also ordered Pagartanis to make $6.5  million in restitution and serve three years of supervised release.

Pagartanis’s attorney, Kevin Keating, of Garden City, declined to comment,  as did Eastern District Assistant United States Attorney Artie McConnell, who had asked that Pagatarnis be immediately imprisoned.

McConnell noted in court that Pagartarnis carefully “picked his victims out of a much larger pool” of his financial clients.   

“The defendant targeted elderly investors, the overwhelming majority of whom were single women,” McConnell wrote in court papers. “Many had recently been widowed or had a recent tragic circumstance, such as the death of a child or other family member. Many had dependents or illnesses that involved substantial regular costs. In all instances, the victims were not financially sophisticated and trusted the defendant, who knew that their respective ages and family circumstances made them especially susceptible to his scheme.

"Each stressed to the defendant that they wanted safe, secure and conservative investment vehicles…none were chasing a high rate of return,” McConnell wrote.

Pagartanis falsely claimed he was investing his victims’ money for a regular 8% return in one of two companies, a Canadian firm, Genesis Land Development Corp., or Sonesta International Hotels Corp., using the literature from the businesses available on the internet, or “other misleading or forged marketing materials,” McConnell said.

But in reality, Pagartanis did not invest  the victims’ money, using it instead to pay for his “lavish lifestyle,” or, in a Ponzi-like part of the scheme, pay interest or pay back earlier investors with victims’  money. McConnell said. In all, more than a dozen victims invested $13 million with Pagartanis, losing $9 million between 2000 and 2018.

Before he was sentenced, Pagartanis told the judge, “I’m sorry to all the people I hurt with my actions….I don’t believe all the things that I did. But I did.”

A number of his victims attended the sentencing, along with or relatives of those who were too sick or had died. Several addressed the judge, including Frank Napolitano, of Middle Island, who said his mother, Roseanne Maggio, lost nearly her entire $70,000 life savings to Pagartanis. Napolitano said his mother, who died in 2018, was devasted by the swindle, and had planned to pass the money on to her grandchildren.

Among other victims listed in court papers filed by McConnell, were:

• A woman from East Meadow, identified only as Jane Doe #9, who lost $2.3 million of $3.79 million invested. She had been referred to Pagartanis by ‘an elder caregiver” whose company had an office in the same building as the defendant;
• A woman from North Babylon, identified only as Jane Doe #10, who had been twice widowed, and had “a special needs child.” She lost almost all of the $3 million she invested; and
• A woman from Holtsvile, identified only as Jane Doe #12, a widow who had known Pagartanis for 10 years before she started investing with him. She lost all of $865,000 invested with him.

“Today’s sentence is a well-deserved reckoning for Pagartanis,” said Eastern District United States Attorney Richard Donoghue in a statement. “Protecting investors, especially those that are vulnerable from white-collar criminals is a priority of this office and the Department of Justice.”

By Robert E. Kessler

Robert.Kessler@newsday.com

Bob Kessler covers federal law, including law enforcement agencies such as the FBI, DEA, IRS and ATF, as well as the federal courts.