Steven Pagartanis leaves his arraignment at Suffolk County Court in...

Steven Pagartanis leaves his arraignment at Suffolk County Court in Central Islip on May 30. Credit: Newsday/Thomas A. Ferrara

A former financial adviser from East Setauket was arrested Thursday on charges he ran a multimillion dollar Ponzi scheme that lasted more than 18 years and caused many victims, mostly elderly women, to lose “substantial portions of their life savings,” federal officials said.

Steven Pagartanis, 58, was arraigned Thursday afternoon in federal court in Central Islip on a nine-count indictment charging him with securities fraud and mail and wire fraud conspiracies, according to U.S. Eastern District Attorney Richard P. Donoghue.

Donoghue said Pagartanis “conned vulnerable members of the community who had entrusted him with their hard-earned savings.”

The indictment says the victims lost more than $8 million.

Pagartanis’s attorney, Kevin Keating of Garden City, said after the hearing that his client had entered a not-guilty plea. Keating added that “most of the money” Pagartanis took in went back to his early investors.

Eastern District prosecutor Artie McConnell declined to comment.

Pagartanis was released on condition he undergo electronic monitoring, pending future hearings. He faces up to 20 years in prison if convicted.

In May, the Suffolk County District Attorney’s office arrested Pagartanis on similar charges, which District Attorney Tim Sini then called “a traditional Ponzi scheme.” The Suffolk charges involved four victims who started investing in Pagartanis’ scheme as early as 2013, according to the DA’s office.

The federal charges involve Pagartanis’s alleging duping of at least 17 victims, starting in 2000.

Citing the indictment and other court documents, federal prosecutors said that starting in 2000 Pagartanis “solicited elderly victims to invest in real estate-related investments, including those affiliated with a publicly traded Canadian company. Pagartanis promised the victims that their principal would be secure and earn a fixed return, which he typically claimed to be between 4.5 to 8 percent annually.”

Instead, Pagartanis laundered the money through a network of bank accounts and used the funds “to pay personal expenses, buy luxury items and make the guaranteed ‘interest’ or ‘dividend’ payments to other victims,” prosecutors said. “In all, the victims invested over $13 million and sustained actual losses of over $8 million.”

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