A Waterbury man who worked as an investment advisor was sentenced Friday to seven and a half years in prison for defrauding clients out of $1.5 million.
U.S. District Court Judge Janet Bond Arterton imposed the sentence on Leon C. Vaccarelli, 43, of Waterbury.
After he serves his sentence, Vaccarelli will be on supervised release for three years. He is free on a $100,000 bond and must report to the Federal Bureau of Prisons on Jan. 5. He must also pay full restitution to victims.
In May 2019, a jury found Vaccarelli guilty of multiple counts, including mail fraud, wire fraud, money laundering and securities fraud.
Assistant U.S. Attorneys Michael S. McGarry and Jennifer R. Laraia, who prosecuted the case, requested that Vaccarelli receive a “significant term of incarceration.”
“Vaccarelli abused both his position as a registered representative and his position of trust in the community to defraud vulnerable and unsuspecting victims,” prosecutors wrote, in a pre-sentencing memorandum to the judge. “Vaccarelli callously and selfishly spent the retirement savings of people who could ill afford to lose the money they had saved for their golden years, causing great financial and emotional harm.”
Attorney Jonathan Einhorn of New Haven, who represents Vaccarelli, had asked the judge to impose a sentence of probation.
In a pre-sentencing report, Einhorn indicated that Vaccarelli is an alcoholic who suffers from mental illness, specifically mixed personality disorder. According to Einhorn, tests performed on his client also suggest a “major mood disorder such as bipolar disorder.”
“The principal driver of Leon’s sentence should not be punishment of a man who was undiagnosed and untreated at the time of the conduct in question… the appropriate focus of Leon’s sentence should be treatment,” Einhorn wrote.
Vaccarelli was a registered representative of the Investment Center, a brokerage company, and an investment adviser associated with IC Advisory Services Inc. He also owned the Middlebury-based LWLVACC LLC, and he conducted business through Lux Financial Services of Waterbury.
According to the U.S. Attorney’s office, Vaccarelli gave clients investment advice, and he sold investments and securities to clients throughout the Waterbury area.
The government claimed Vaccarelli defrauded about 15 victim investors out of $1.5 million over a period of six years, from about 2011 to 2017. Prosecutors claim he told clients he would invest their money in IRA rollover accounts, money market accounts and certificates of deposit, but instead used the money for his own benefit. The money went toward personal expenses such as tuition and mortgage payments, according to the U.S. Attorney’s office.
Vaccarelli also was accused of using customer funds to make phony “interest payments” to other victims. Individuals from a range of professions, including a retired teacher, a retired construction worker and medical professionals were victimized in the scheme, according to the government.
Vaccarelli was accused of convincing an elderly woman to transfer about $300,000 from a safe investment portfolio into an account which Vaccarelli controlled. Vaccarelli used the money for personal expenses and to pay off an investor who was threatening to sue him. Vaccarelli also stole nearly $500,000 from a trust established in 1991 to care for a disabled woman, according to the U.S. Attorney’s office.
Contact Michelle Tuccitto Sullo at msullo@newhavenbiz.com
