Former Connecticut Businessman Pleads Guilty to Stealing $700,000 in Investor Funds

Nora R. Dannehy, Acting United States Attorney for the District of Connecticut, announced that ANTHONY IATI, 48, of York, Pennsylvania, pleaded guilty today before United States District Judge Mark R. Kravitz in New Haven to one count of interstate transportation of money obtained by fraud arising from his scheme to misuse investor funds.

According to documents filed with the Court and statements made in court, ANTHONY IATI and his company, Great River Capital LLC of Westport, Connecticut, sold jewelry to department stores. In order to finance the company while the company awaited payment from its customers, IATI obtained funds from investors. This type of financing is known as “factor financing.” IATI obtained funds from three investors, two from Pennsylvania and one from Connecticut, by representing that the funds would be used as factor financing. IATI represented to the three investors that the funds would be returned to the investors at such time as IATI received payment from his customers. On two occasions, IATI represented to the investors that the funds previously invested would be rolled over as another factor financing investment rather than be returned to the investors.

In approximately 2006, without notifying his investors, IATI used some of the factor financing he had obtained from his investors to invest in real estate in Norwalk, Connecticut. In approximately December 2006 and January 2007, IATI caused an investor to send funds to IATI from Pennsylvania to his company’s bank account in Connecticut. At the time of the interstate transportation of funds, IATI knew that he had already converted the investors’ funds for his real estate investment and was not using the funds as factor financing as he had represented. As a result of IATI’s misappropriation of funds, investors lost approximately $700,000.

Judge Kravitz has scheduled sentencing for May 15, 2009, at which time IATI faces a maximum term of imprisonment of 10 years and a fine of up to $1.4 million, as well as an order of restitution.

This matter was investigated by the Federal Bureau of Investigation. The case is being prosecuted by Senior Litigation Counsel Richard J. Schechter.