Home New York Press Releases 2012 Importers Charged with Securities Fraud

Importers Charged with Securities Fraud
Defendants Accused of Defrauding Investors of $26 Million

U.S. Attorney’s Office April 05, 2012
  • Eastern District of New York (718) 254-7000

Three principals of a company that imported paving stones from Australia were charged with conspiracy, securities fraud, and money laundering in an indictment unsealed today in federal court in Central Islip, New York. The charges against Eric Aronson, Vincent Buonauro, and Fredric Aaron arose from their solicitation of investor money for, and their operation of, Permapave Industries and Permapave USA (“Permapave”). Permapave marketed porous paving stones in the United States that were manufactured in Australia.

The defendants are scheduled to be arraigned this afternoon before United States Magistrate Judge Gary R. Brown at the United States Courthouse at 100 Federal Plaza, Central Islip, New York.

The charges were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and Janice K. Fedarcyk, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office. The criminal case has been assigned to United States District Judge Arthur D. Spatt.

According to the indictment, the defendants issued promissory notes to investors and promised to use the proceeds to finance shipments of Permapave paving stones from Australia to the United States. The indictment and court filings charge that from 2006 to 2010, the defendants operated Permapave as a Ponzi scheme, raising approximately $26 million through false representations and paying back some investors from the investments of other investors because of the minimal revenues Permapave generated. The government’s pleadings also allege that the defendants converted more than $3 million of investor funds for their personal use, including home mortgage payments, down payment on a residence, automobile payments, and credit card purchases for watches, jewelry, clothing, vacation resorts, and air travel.

“The defendants allegedly abused the trust placed in them by their investors by lying and stealing the investors’ money. They promised a sound investment in a quality product but instead shuttled the investors from one deceptive securities offering to another in an attempt to maintain their house of cards. This office is committed to protecting the investing public and will tirelessly investigate and prosecute those who defraud investors who believed they were investing in a legitimate enterprise,” stated United States Attorney Lynch.

FBI Assistant Director in Charge Fedarcyk stated, “The defendants are alleged to have misled investors and, in paying some of them with proceeds from others, engaged in a Ponzi scheme to conceal how flimsy the investment was. The FBI is always at the ready to uncover unscrupulous investment schemes.”

The charges in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted, each defendant faces a maximum of 20 years’ imprisonment on the most serious count.

The government’s case is being prosecuted by Assistant United States Attorneys William P. Campos and Karen Hennigan.

This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency task force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

The Defendants:

Eric Aronson, age 43
Vincent Buonauro, age 40
Fredric Aaron, age 48