Investment Advisor Charged with Defrauding Orange Church, Multiple Investors
|U.S. Attorney’s Office December 15, 2009|
Nora R. Dannehy, United States Attorney for the District of Connecticut, and Kimberly K. Mertz, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, announced that GREGORY P. LOLES, 50, of Easton, was arrested today by the Federal Bureau of Investigation on a criminal complaint charging him with mail fraud and wire fraud. The charges stem from an alleged scheme to defraud several investors, including a church endowment fund, of several million dollars.
LOLES voluntarily surrendered himself this morning and appeared before United States Magistrate Judge Holly B. Fitzsimmons in Bridgeport. Judge Fitzsimmons ordered LOLES detained pending a detention hearing that is scheduled for Friday, December 18, at 3:00 p.m.
According to court documents and statements made in court, LOLES owns Apeiron Capital Management, Inc. LOLES also is a parishioner at St. Barbara’s Greek Orthodox Church in Orange, Connecticut, and served on the board of the church’s endowment fund. It is alleged that since 2001, LOLES engaged in a scheme to defraud multiple investors, including the Church, by not investing funds as he had represented. As part of the scheme, it is alleged that LOLES promised to his investors that their funds would be invested in certain interest-yielding bonds, including a bond known as “Knightsbridge Holding ARB,” and that the investments in the bonds would offer a steady rate of return of between 7 and 8 percent. However, “Knightsbridge Holding ARB” did not exist, and it is alleged that LOLES made regular payments to investors using investment principal, and that LOLES created false statements on his computer and sent them to investors.
It is alleged that LOLES used invested funds for his own personal use, and diverted a portion of the funds to his car racing business, Farnbacher-Loles Motor Sports, a high-performance car racing team based in Danbury, Connecticut.
U.S. Attorney Dannehy and FBI Special Agent in Charge Mertz noted that the investigation into this alleged scheme is ongoing, and asked individuals who believe they may be a victim of this scheme, or anyone with information related to this scheme, to immediately contact the FBI at (203) 777-6311.
If convicted, LOLES faces a maximum term of imprisonment of 20 years, on each count. U.S. Attorney Dannehy stressed that a complaint is only a charge and is not evidence of guilt. The defendant is entitled to have this matter presented to a grand jury and, in the event an indictment is returned, he is entitled to a trial at which it will be the Government’s burden to prove guilt beyond a reasonable doubt.
This matter is being investigated by the Federal Bureau of Investigation, with the assistance of U.S. Immigration and Customs Enforcement. The case is being prosecuted by Assistant United States Attorney Michael S. McGarry.