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Glen Rock Man Charged in Alleged Ponzi Scheme

39-year-old George Sepero is accused of defrauding clients out of $3.5 million, funds U.S. attorneys say were used to support a lavish lifestyle

A Glen Rock man was arrested Wednesday by FBI agents for his alleged role in a Ponzi scheme in which he's purported to have defrauded victims out of more than $3.5 million, money authorities say he used to fund a lavish lifestyle.

George Sepero, 39, of Glen Rock, and Carmelo Provenzano, 29, of Garfield, were arrested Wednesday by FBI agents and are facing charges of wire fraud conspiracy. Authorities said the Ponzi scheme utilized a series of fake hedge funds, and lasted between 2009 until July of 2011, emptying a total of more than $3.5 million from investor pockets.

According to the complaint filed in federal court in Newark, Sepero and Provenzano are alleged to have used bogus screen shots to deceive investors that a computer algorithm they developed could yield returns of 170 percent despite a market downturn. One investor lost $2.1 million, U.S. Attorney Paul Fishman said in a release. The charges could land the two in jail for two decades, federal authorities say.

“With other people’s cash in their pockets, the defendants allegedly went on a spending spree involving luxury vehicles, international travel and extraordinary bar bills," Fishman said. According to the government, those luxuries from investor money include:

  • An average of about $25,000 a month in credit card bills
  • Bar tabs of approximately $18,241 – including a $4,000 tip; approximately $14,034 on separate nights at “Drai’s Hollywood” nightclub in Los Angeles
  • Luxury suite hotel rooms totaling tens of thousands of dollars; air flights to Paris, Los Angeles, Chicago, and elsewhere.  
  • A customized Ford F-350 "Harley Davidson Edition worth $80,000 for Sepero
  • A Range Rover worth over $71,000 for Provenzano
  • Personal expenditures including mortgage payments, home improvements, jewelry and others 

“Nobody asks to be defrauded, but those looking to invest should always be skeptical of rates of return that go so far beyond the norm,” Fishman said in the news release.

The defendants allegedly furthered the scheme by emailing victims fake statements showing their money had been invested in the foreign currency markets and was achieving substantial results, which the government said was compouded by fake e-mails sent under a fictional character, a one "Mel Tannenbaum".

Federal authorities also filed to forfeit Sepero's Glen Rock house on Hazlehurst Ave. as well as various vehicles federal officials contend the pair obtained with investors' money.

Ken F. December 15, 2011 at 12:34 PM
It's amazing what people will do when they succumb to greed.
Bruce Packer December 15, 2011 at 02:38 PM
Absolute selfishness. He's got two young kids yet he lived this lifestyle and took the horrible risks that he took. Now they will get pulled from their home, friends, and everything that they've ever known because of his greed and stupidity.
Craig Hueneke December 15, 2011 at 06:08 PM
It's funny.. These two schmucks get pinched for pilfering 3.5 million (as they should), and yet the "big bank bosses" that made BILLIONS in the sub-prime mortgage securitization scams (which was basically a massive ponzi scam) get jobs in Washington D.C. with the Fed! Oh hold on......... I just got an email from our Founding Fathers.. they said that our nation was built to thrive on pride and trust, not greed and corruption.
Harlan Consider December 15, 2011 at 08:35 PM
There is much blame to go around regarding the causes of the current financial mess, with the sub-prime mortgage issue being just one part. If you really want to isolate that as being the big issue, then you will need to make room in the jails for some politicians who instigated sub-prime mortgage lending. However, bottom line, as crazy as all the sub-prime stuff seems today, no laws appear to have been broken, and many millions of us had a great ride as a result of it.
Craig Hueneke December 17, 2011 at 05:08 AM
H.C. "A GREAT RIDE?" Are you a bank C.E.O? Because they and the politicians are the only ones who would say that! These past three years have been VERY difficult for most Americans. And to say "no laws appear to have been broken" confirms my suspicions that you are a bank C.E.O. because that sounds like it came right out of Jamie Dimon's Cook Book of B.S. & Greed... Trust me when I tell you PLENTY of laws have been broken. You are more than welcome to come to my office and read the hundreds of forensic audits of sub-prime loans that are/were beyond illegal. Food for Thought: If no laws have appeared to of been broken than why are Massachusetts, California and Nevada Attorney Generals, and as of today, the SEC going after the banks and Judges across the U.S. tossing out mortgages that have been shown to have been based on fraud? Great Ride?? Ha!
Ken F. December 17, 2011 at 02:14 PM
Great ride.... now get off my back, the ride is over.
Elizabeth Cox December 17, 2011 at 03:24 PM
those poor kids!
Harlan Consider December 17, 2011 at 03:35 PM
The "great ride" comment was based upon the millions of people who, for many years, used their houses as personal ATM machines and led the high life.

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