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Post date: March 24 2004

Windham Ski Patroller Targets Fellow Skiers In Stock Fraud Scheme

Attorney General Spitzer today announced that a former stock broker, was arrested on felony charges stemming from a stock fraud scheme in which $4.7 million was stolen from members of the ski patrol based at Windham Mountain Ski Resort.

Frank S. Marone, 41, of Fairfield, Connecticut, was arraigned in Bridgeport Superior Court, before Judge Burton Kaplan based upon a warrant for his arrest on felony charges filed in Windham Town Court on March 18, 2004. On March 19, Marone waived extradition, was transported to Windham Town Court, and arraigned before Judge Maureen McCarthy.

The charges filed against Marone include two counts of Grand Larceny in the First Degree, a class "B" felony; two counts of Grand Larceny in the Second Degree, a class "C" felony; two counts of Grand Larceny in the Third Degree, a class "C" felony; and one count of Scheme to Defraud in the First Degree and six counts of violating New York's Martin Act , all class "E" felonies.

Marone pleaded not guilty to the charges and Judge McCarthy set bail at $2 million. Marone was remanded to Greene County Jail.

It is alleged that from January 1999 through January 2004, Marone, then a part-time member of the Ski Patrol, engaged in a scheme to steal millions of dollars from his fellow patrol members, through a series of fictitious equity funds he dubbed the "Patrollers Capital Funds."

It is alleged that Marone engaged in an elaborate series of misrepresentations to advance the scheme. Marone allegedly told investors that the funds managed $8.4 million in assets, and traded in high-tech, and Fortune 500 companies. However, prosecutors allege that all of the investors' money was deposited directly into Marone's personal bank accounts. To induce individuals to invest, Marone put on investment presentations and conducted meetings at Windham Mountain, and at investors' homes, touting the funds. He also is alleged to have created fraudulent stock certificates, prepared phony account statements, and authored e-mails trumpeting the performance of the fund.

Attorney General Spitzer wished to thank the United States Security and Exchange Commission, the Greene County District Attorney's Office, and the Town of Fairfield, Connecticut Police Department for their assistance in the investigation.

These charges are merely allegations, and Marone is presumed innocent until and unless proven guilty.

The case is being prosecuted by Assistant Attorneys General Stephen J. Maher and Richard S. Ernst of the Criminal Prosecutions Bureau under the supervision of Deputy Bureau Chief Viola Abbitt. Supervising Investigator David Adams and Investigator Mark Spencer of the Investigations Bureau assisted in the investigation.