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Geidel gets 3 1/2 years in investment swindle ; Must repay victims $1.3 million he stole

Timothy Geidel's investment scam was, by own his admission, uniquely disturbing and far reaching.

Not only did he steal over a period of 20 years, but his victims were lifelong friends and family.

A federal judge on Friday sentenced Geidel to 3 1/2 years in prison and ordered him to repay $1.3 million in stolen money. "I've known most of you my whole life," Geidel told his victims, his eyes wet with tears and his voice cracking with emotion, "and I'm ashamed of what I've done." Unlike most investment schemes, this one was unusual because the criminal preyed on victims he grew up with and knew well.

"You came into our home. You sat at our dining room table," said Carol Forti of Derby, one of the victims. "I can't believe you perpetrated this on me for 18 years."

Many of the people who turned out for Geidel's sentencing live in and around Derby and Angola, and many were close friends with him and his family. Several victims are active or retired employees of the Lake Shore Central School District.

"I wish we weren't here," said Gifford M. Swyers of Angola. "And I don't stand here saying I hate Tim Geidel. I feel sorry for him."

Geidel, 49, of Hamburg, faced a maximum of nearly six years in prison after pleading guilty in September to fraud charges stemming from his 20-year investment scam. He admitted defrauding more than 40 investors out of $1.3 million as part of a Ponzi scheme that allowed him to use his client's funds for personal use.

"The trust that was broken between family members is truly overwhelming," said Samantha Panzica, a daughter of one of the victims.

Arrested in late 2010, the former Amherst investment adviser now claims he's virtually broke. He spoke often Friday of his teenage daughter and the humiliation and embarrassment he's brought on her and the rest of his family, including his father who was too ill to be in court. "I know he's done a bad thing but please be lenient," Anna Geidel, his mother and one of the victims in the scam, asked U.S. District Judge William M. Skretny, "because his father needs him, his daughter needs him."

A good part of Geidel's sentencing dealt with two distinct, almost polar opposite, characterizations of the man who grew up in a well-known Southtowns family and somehow went wrong. Fonda D. Kubiak, a federal public defender, described her client as a good man gone astray and noted that, even after his guilty plea, he continued to work and set aside money for the victims.

"There's no winners in this, judge," Kubiak told Skretny. "He's done some bad things, but I don't think he's a bad guy."

When it was his turn, the federal prosecutor handling the case offered a far different view of the adviser-turned-scammer. He also objected strenuously to the suggestion that Geidel is not a bad man. "He is," said Assistant U.S. Attorney Russell T. Ippolito Jr. "Who else steals from their friends and family? Who else steals for 20 years?"

Ippolito was quick to note that Geidel didn't just steal. He also tried to hide his scheme from banking regulators by keeping his cash withdrawals under $10,000, the legal threshold for reporting financial transactions.

"You're responsible for this entire mess, plain and simple," Skretny told Geidel at one point. "From that standpoint, you're not a good man."

Arrested by U.S. Secret Service agents, Geidel was accused of using his affiliation with Georgetown Capital in Williamsville and the Royal Alliance fund in New York City to convince clients of his integrity and legitimacy. From Day One, Georgetown has said it had no knowledge of Geidel's wrongdoing until after a client stepped forward. The company also claims Geidel was quickly terminated and the allegations turned over to federal agents.

The two companies, as well as Geidel, are still the target of a separate civil suit by investors who have accused Geidel of selling "bogus securities" and inducing investors by promising "stable rates of return" of at least 6 percent. Geidel's sentence is the culmination of an investigation by the Secret Service, Internal Revenue Service, and detectives from the towns of West Seneca, Hamburg and Evans.