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Judge OKs payouts for Ponzi scheme victims
Under SEC's plan, 613 people swindled by Richard Piccoli will split $6.2 million

The man who stole from them is in prison, but that doesn't come close to justice served in their eyes.

For victims of one of biggest Ponzi schemes in recent memory, real justice means getting back some of the $25 million stolen from them.

That long-awaited day is finally near.

A federal judge recently paved the way for the Securities and Exchange Commission to pay out $6.2 million to people victimized by convicted investment scammer Richard S. Piccoli.

The money will go to 613 of Piccoli's victims, many of them elderly Catholics and clergy recruited through church bulletins and priests Piccoli used as references.

"Great news," said 82-year old Audrey Marzec of Hamburg. "I thought they had forgotten about us."

Unlike the rapid criminal prosecution of Piccoli -- the 83-year-old scam artist was sentenced to 20 years in prison in 2009 -- the legal battle over money took a long time.

Most of the victims have waited three years or longer to recover some of what Piccoli took from them.

No one is getting back everything. On average, victims are getting about 25 cents on the dollar.

"I'll settle for that," said Roberta Thuman of the Town of Tonawanda. "My husband and I are 80. We want to recoup what we can."

The money was recovered by the SEC as part of a civil suit against Piccoli and his company, Gen-See Capital Corp. The $6.2 million comes from the sale of assets, both personal and business, seized by the government.

"The SEC is pleased that its enforcement action has led to this disbursement of funds to victims of Richard Piccoli's massive investment fraud, which robbed hundreds of victims of their life savings," David P. Stoelting, an SEC lawyer, said in a statement.

Ask any of the victims, and they are likely to tell you there are two moments during the Piccoli case they will always remember.

One is the day Chief U.S. District Judge William M. Skretny sentenced Piccoli to 20 years, a sentence likely to result in him dying in prison.

"You ran a shameful, disgraceful and rather despicable Ponzi scheme," Skretny told Piccoli. "It's time after all these years to pay the price."

The other moment will come on the day the check arrives. And from all indications, that should be in the next month or two.

"It's certainly taken a long time," said Joann Abram of Hamburg.

Skretny recently gave final approval to the SEC's disbursement plan, a complex strategy that included a review of each individual claim and a determination of what each victim should receive. The review process also included a call center and website for victims eager to file a claim.

Government officials said the review took longer than expected because most of Piccoli's business records were paper documents that took years to sift through.

The court-approved disbursements range from a high of $1.3 million to a low of $1,214.

"It's one of the largest frauds we've ever seen," U.S. Attorney William J. Hochul Jr. said of the number of victims and the amount stolen. "The victims are getting back only a percentage of what they lost, but the system worked."

"I'd love to get all of it back, and I'd love to get some of it back," Thuman said of the $36,000 she and her husband lost to Piccoli. "Whatever we get, we'll be happy."

Thuman said the money, like Piccoli's sentencing, will provide some closure to what has been a difficult three-plus years for her family.

They had learned to trust Piccoli, in part because he advertised in church bulletins, and they were shocked when they first heard about his elaborate Ponzi scheme, an investment scam in which money from new investors is used to pay off earlier investors.

Investigators have compared Piccoli to Bernard Madoff, the Manhattan scam artist who stole billions from investors and is now serving a 150-year prison term.

Piccoli was arrested in January 2009 after an undercover investigation by the U.S. Postal Inspection Service and the Internal Revenue Service Criminal Division.

During that investigation, a postal inspector posing as a potential investor recorded numerous conversations with Piccoli.

"We can make a hell of a profit," Piccoli said during one of those conversations.

"He got what he deserved," said Marzec, who lost an estimated $10,000. "It was a long time coming."

email: pfairbanks@buffnews.com