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Post date: June 22 2018

A.G. Underwood Announces Resentencing Of Previously-Convicted Investment Fraudster For Willfully Failing To Pay Restitution To Victims Of The Largest Theft In Greene County History 

News from the New York Attorney General's Office

June 22, 2018

Attorney General's Office Press Office / 212-416-8060


Convicted Former Stockbroker Franklin S. Marone Concealed Assets From the Court In An Effort To Avoid Repaying Victims Of His $5.4 Million Fraud Scheme; Also Pleads Guilty To Offering A False Instrument For Filing And Perjury

 Instead of Paying Restitution He Owed Victims, Marone Spent Lavishly on Jeep Wranglers, Gym and Spa Memberships, A Cruise, and More

Marone Will Be Sentenced To A Total Of 10 1/3 To 29 Years in State Prison; Still Faces Additional Charges in Queens County Supreme Court

GREENE COUNTY — Attorney General Barbara D. Underwood today announced the re-sentencing of Franklin S. Marone, 55, of Queens, NY in Greene County Court for willfully failing to pay restitution to victims of his $5.4 million fraud scheme, in violation of the terms of his prior sentence. Additionally, Marone pleaded guilty to perjury and false filing charges for submitting fraudulent financial disclosures concealing his assets from the court in order to avoid paying restitution to the victims. Between 1998 and 2004, Marone, a former stockbroker, stole over $5.4 million from his fellow members of the ski patrol at a Catskills mountain resort through an elaborate investment fraud scheme. After being convicted of Grand Larceny in the First Degree and Scheme to Defraud, in an effort to conceal his assets and income and to avoid paying restitution, Marone filed two false financial affidavits with the court. Marone will be sentenced to a total of 10 1/3 to 29 years in state prison. 

“After already being convicted once, the defendant showed no remorse for his prior victims and completely disregarded the law,” said Attorney General Underwood. “No matter how covert or complex the scheme, my office will continue to work with our law enforcement partners to root out fraud and protect New Yorkers from financial exploitation.”

Superintendent George P. Beach II said, “I applaud the dedication and strong investigative work of our State Police members and our partners in the Attorney General’s office in uncovering this blatant fraud. This individual preyed upon the trust of friends and colleagues to perpetuate an elaborate scheme. Even after his initial sentencing he continued to try to circumvent the law and now he will be held accountable for his criminal actions. We will not tolerate such crimes in New York State and will continue to work to protect the victims of such crimes.”

The defendant’s sentencing and conviction were the result of a joint investigation by the Attorney General’s Criminal Enforcement and Financial Crimes Bureau and the New York State Police Financial Crimes Unit in relation to Marone’s commission of the largest theft in Greene County history.

On June 22, 2004, Marone was convicted in Greene County Court of two counts of Grand Larceny in the First Degree (a class “B” felony) and one count of Scheme to Defraud in the First Degree (a class “E” felony) for perpetrating a massive investment fraud scheme. Between November 1998 and January 2004, Marone, a former stockbroker, targeted his fellow members of the ski patrol at a Catskills mountain resort and fraudulently solicited them to invest over $5.4 million in a series of fictitious equity funds that he dubbed “Patrollers Capital Funds.” In furtherance of his scheme, Marone created fraudulent stock certificates, prepared phony account statements, and sent emails to his victims touting the performance of the phony funds. In reality, all of the investors’ money was deposited directly into Marone’s personal accounts. After pleading guilty, Marone was sentenced to 6 to 18 years in state prison and ordered to pay over $4.6 million in restitution to his victims.

The defendant still owes $1.2 million to the victims of this prior securities fraud scheme. Marone began missing his court-ordered restitution payments after he was released from parole in early 2014. After continued failure to make timely payments, the Honorable Terry Wilhelm of Green County Court ordered a restitution hearing and directed Marone to complete financial disclosure affidavits. In July and August 2017, Marone filed two sworn affidavits with the court, attesting that he had no assets and minimal income. 

On June 11, 2018, a restitution hearing was conducted before the Hon. Wilhelm, resulting in a finding that the defendant had willfully failed to pay restitution to his 29 prior victims. The court heard evidence that the defendant only paid a total of $15,000 between 2013 and 2017, while simultaneously: receiving in excess of $55,000 in checks payable to himself or cashed on his accounts; spending over $64,000 in upgrades to Jeep Wranglers for customized oversized tires, wheels, a light bar, and other equipment; spending over $18,000 for a gym and spa membership; spending over $4,000 on a cruise; and pawning over $9,000 worth of property.

On June 21st, Marone was resentenced to an indeterminate term of imprisonment of 8 1/3 to 25 years in state prison for his willful failure to pay restitution. The court further ordered that the defendant’s prior $1.2 million restitution order remain in place, so that his victims may receive compensation in the future. 

Also on June 21st, Marone entered a guilty plea to two counts of Offering a False Instrument for Filing in the First Degree (a class “E” felony) and two counts of Perjury in the Third Degree (a class “A” misdemeanor) for filing false affidavits with the court concealing his assets and income. Marone is anticipated to receive a consecutive sentence of 2 to 4 years in state prison upon his guilty pleas. This combined sentence will result in a total state prison term of 10 1/3 to 29 years incarceration.

Marone still faces additional charges in Queens County. According to statements made by prosecutors and documents filed in Queens County Supreme Court, between January 2014 and September 2017, Marone allegedly stole over $270,000 from multiple victims – including his 88-year-old mother. Moreover, between May and June 2016, Marone allegedly impersonated his mother in a series of recorded phone calls with a financial institution, in an attempt to steal over $50,000 from her account. Marone also allegedly targeted and stole over $45,000 from an ex-girlfriend and a family friend. Marone allegedly used the stolen money to purchase Jeep Wrangler upgrades, cruises, and thousands of dollars in premium gym memberships for himself, his current girlfriend, and their respective families. 

The Queens County Indictment charges Marone with one count of Grand Larceny in the Second Degree (a class “C” felony), one count of Grand Larceny in the Third Degree (a class “D” felony), two counts of Identity Theft in the First Degree (a class “D” felony), one count of Scheme to Defraud in the First Degree (a class “E” felony),and one count of Criminal Impersonation in the Second Degree (class “A” misdemeanor). Marone’s bail was set at $500,000 cash or $1 million bond at his January 2018 arraignment. He is next due in Queens Supreme Court on July 12, 2018 before the Honorable Barry Kron.   

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

Attorney General Underwood thanks the New York State Police Financial Crimes Unit for its valuable assistance in this investigation.

The case is being prosecuted by Assistant Attorney General Philip V. Apruzzese of the Attorney General’s Criminal Enforcement and Financial Crimes Bureau, with the assistance of Legal Support Analyst Rebecca Jacobson. The Criminal Enforcement and Financial Crimes Bureau is led by Bureau Chief Stephanie Swenton and Deputy Bureau Chief Joseph D’Arrigo. The Division of Criminal Justice is led by Executive Deputy Attorney General Margaret Garnett.

The OAG investigation was conducted by Investigator Mark Spencer, under the supervision of Deputy Bureau Chief Antoine Karam. The Investigations Division is led by Chief Investigator Dominick Zarrella. Audit work was performed by Auditor Investigator Marcos Perez of the Forensic Audit Section. The Forensic Audit Section is led by Deputy Chief Sandy Bizzarro and Chief Edward J. Keegan.