Willowick Man Sentenced for Defrauding Investors

William J. Edwards, United States Attorney for the Northern District of Ohio, announced today that Philip D. Rossi, age 60, of Willowick, Ohio, was sentenced by U.S. District Judge Christopher A. Boyko to 144 months in prison for defrauding individuals who had invested money with him. Judge Boyko departed from the U.S. Sentencing Guidelines recommended range of 63-78 months. Rossi was also ordered to pay restitution totaling $3,531,622.51 to the 44 victims of his criminal conduct.

On November 18, 2008, a one-count indictment was filed in U.S. District Court in Cleveland, Ohio, charging Rossi with one count of mail fraud. He pleaded guilty to mail fraud on April 16, 2009.

According to the indictment, Rossi was a registered investment broker who owned and operated Rossi & Associates, an accounting firm, and Patterson-Ross Financial Resources, Inc., a money management company. The indictment further alleged that the defendant falsely represented that he would purchase stocks, bonds or notes in the names of the individual investors, but he did not. The indictment alleged that, with respect to certain investors, Rossi converted their investment money for his own purposes and personal use without purchasing securities. For other investors, the defendant purchased securities, notes or bonds in the name of his company, Patterson-Ross Financial Resources, Inc., and then converted the investment money for his own purposes and personal use by liquidating the investment accounts or collecting disbursements after notes and bonds matured.

The indictment alleged that Rossi lulled investors into a false sense of security by sending them fictitious account statements or correspondence detailing their ownership of various stocks, bonds or notes. The indictment further alleged that when investors requested the return of their investment money, Rossi falsely stated that the investment money was tied up and could not be withdrawn, tax penalties precluded “early” withdrawals, or that post-9/11 regulations required the Department of Homeland Security to complete a background investigation about the investor prior to the disbursement of investment money exceeding $10,000.

This case was prosecuted by Assistant United States Attorneys Bridget M. Brennan and John D. Sammon following an investigation by the Cleveland Office of the Federal Bureau of Investigation and the Cleveland Office of the United States Postal Service.