Richmond Investment Scheme Sentencing

WRVA News
July 01, 2020 - 9:31 pm
usinessman giving bribe money to partner in a corruption scam

krisanapong detraphiphat / iStock / Getty Images Plus

Categories: 

Richmond, vA _ A Richmond man was sentenced today to over 10 years in prison for his execution of a $7 million investment fraud scheme he operated for nearly a decade.

According to court documents, Leonard J. Cipolla, 71, was the founder, owner, and operator of Tate Street Trading, Inc., in Richmond. Between 2009 and 2019, Cipolla solicited more than $7 million in investment funds from more than 40 individuals located in Virginia, New York, and Washington, D.C. Cipolla convinced these individuals to provide him with their savings by assuring the investors that he was a highly experienced, highly successful trader in commodity futures and options. Cipolla promised his investors that he could guarantee them significant fixed rates of return on their investments, and that Cipolla’s management fee would be drawn only from the profits that Cipolla made over and above each investor’s promised rate of return. He also assured investors that Cipolla was qualified to manage tax-deferred retirement accounts, and that he would roll the investor’s existing Individual Retirement Account (IRA) into a Tate Street-managed, tax-deferred IRA. As time passed, Cipolla provided many of his investors with account statements that purported to show the investor’s principal was safely intact, and growing at the promised rate of return.

In reality, Cipolla pooled his investors’ savings as soon as those individuals’ personal checks, IRA roll-overs, and wires were deposited into his bank accounts. Cipolla used only a fraction of those pooled investment funds to trade in the futures market, and he ultimately lost nearly the entire amount of investor funds that he actually invested. Cipolla further dissipated the remainder of his investors’ savings on unauthorized expenses, to include making payments to earlier investors, and paying his own personal expenses.