WASHINGTON, April 5 (UPI) -- Three officials of an import company were charged with defrauding investors of $26 million in a Ponzi scheme in an indictment unsealed Thursday in New York.
Eric Aronson, Vincent Buonauro and Fredric Aaron were charged with conspiracy, securities fraud and money laundering for their efforts to get investors for Permapave Industries and Permapave USA, the U.S. Justice Department said in a release.
The indictment indicated the defendants issued promissory notes to investors and promised to use the funds to finance shipments of Permapave paving stones from Australia to the United States. The indictment and other court documents said the trio ran the company as a Ponzi scheme from 2006 to 2010, raising about $26 million through false representations and repaying some investors with investments of other investors.
The government also alleges the defendants used more than $3 million of investor funds for personal use, including mortgage payments, down payment on a residence, automobile payments and credit card purchases for watches, jewelry, clothing, vacation resorts and air travel.
"The defendants allegedly abused the trust placed in them by their investors by lying and stealing the investors' money," Loretta E. Lynch, U.S. attorney for the Eastern District of New York, said. "They promised a sound investment in a quality product, but instead shuttled the investors from one deceptive securities offering to another in an attempt to maintain their house of cards."