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Post date: May 14 2012

A.G. Schneiderman Announces Arrest Of Bronx Fraudster Who Operated Multi-Million Dollar Ponzi Scheme

Owner Of The Van Zandt Agency Arrested On 35-count Indictment Charging Securities Fraud, Grand Larceny, Scheme To Defraud And Money Laundering

Schneiderman: Hardworking People Put Their Trust In Van Zandt Only To Have Their Life Savings Stolen

NEW YORK - Attorney General Eric T. Schneiderman today announced the arrest of and unsealing of a 35-count indictment against Robert H. "Bob" Van Zandt for operating a massive multi-million dollar Ponzi scheme spanning years. A Bronx County Grand Jury indicted Van Zandt on two counts of Money Laundering in the First Degree (a Class "B" felony), two counts of Scheme to Defraud in the First Degree (a Class "E" felony), two counts of Securities Fraud under the Martin Act (a Class "E" felony) and 29 counts of Grand Larceny in the Second and Third Degrees (Class "C" and "D" felonies, respectively). The defendant faces up to 25 years in prison if convicted of the highest count. Dozens of New Yorkers fell victim to this scheme.

"Money laundering and securities fraud are serious crimes, and when someone abuses the trust built upon longstanding relationships to steal individuals' life savings, our office will prosecute that person to the fullest extent of the law," said Attorney General Schneiderman. "It's unconscionable that many hard-working people put their futures in the hands on this defendant only to see their financial security destroyed by greed. Mr. Van Zandt stole his victims’ life savings, and forced some of them to re-enter the workplace or rely on government assistance to survive, while others face foreclosure on their homes or bankruptcy. The perpetrator of this despicable Ponzi scheme will be brought to justice."

Van Zandt was arraigned today in Bronx County Supreme Court before the Honorable Justice Denis Boyle. According to the indictment filed today and statements made by prosecutors at the arraignment, Van Zandt ran the Van Zandt Agency, a well-known tax-preparation business in the Bronx, for decades. Starting in 2007, Van Zandt began accepting investments from tax preparation clients, who trusted him to manage their retirement funds and savings. In many cases, these investors handed over their entire life savings or retirement accounts to Van Zandt, only to see their money disappear. From at least February 2008 through January 2011, Van Zandt solicited money from unsuspecting clients, promising guaranteed rates of returns.

According to the indictment and statements made by prosecutors at the arraignment, Van Zandt's alleged investment opportunities turned into a purely Ponzi-style scheme starting in approximately 2008. Van Zandt guaranteed high rates of return to new investors, promising to invest their money in lucrative securities, including real estate projects that were, in fact, impossible to build. This money was not invested as promised, but rather was used to pay previous investors or diverted for personal expenditures. This scheme brought in over $4.6 million from February 2008 through January 2011 alone.

Van Zandt also allegedly abused his position as a manager of a tax preparations business to identify and lure new investors, targeting victims who had large amounts of money available, such as retirement funds, savings, inheritances or settlements. Van Zandt then made materially false representations and failed to disclose material facts to his investors in order to induce them to invest enormous sums of money with him, ranging from $25,000 to nearly $900,000. The invested monies were deposited into accounts affiliated with the Van Zandt Agency or controlled by Van Zandt and then commingled and transferred between accounts as needed, to pay investors, business expenses, and for personal use. Contrary to the promissory notes or shareholder agreements that Van Zandt gave to his victims, this money was never legitimately invested. In particularly egregious cases, although Van Zandt promised that investors' money would be used to purchase government bonds or corporate securities, no such bonds or securities were ever purchased for the victims.

Van Zandt is currently in custody on $500,000 bail. The Honorable Justice Denis Boyle ordered that the defendant surrender his passport.

The charges are merely accusations and the defendant is presumed innocent until and unless proven guilty in a court of law.

The case was a result of a joint investigation by the Attorney General's Office and the New York State Department of Financial Services. Investigator Robert Tarwacki provided invaluable assistance to the investigation, under the supervision of Ricardo Velez, Director of the Criminal Investigations Bureau, and Benjamin M. Lawsky, Superintendent of the Department of Financial Services. The Attorney General thanked Superintendent Lawsky and his staff for their assistance in this investigation.

This case originated in the Attorney General's Investor Protection Bureau. Their investigation is ongoing. This case is being prosecuted by Assistant Attorney General Benjamin J. Mantell and Assistant Attorney General Joseph G. D'Arrigo of the Criminal Prosecutions Bureau, under the supervision of Deputy Bureau Chief Stephanie Swenton, Bureau Chief Gail Heatherly, and Executive Deputy Attorney General for Criminal Justice Nancy Hoppock. Assistant Attorney General Michelle Maerov also assisted in this investigation. This investigation was handled by Investigator Edward Ortiz and Analyst Justin Tatham, under the supervision of Supervising Investigator Kenneth Morgan, Deputy Chief of Investigations John McManus, Deputy Chief Investigator John Reidy and Chief Dominick Zarrella.