In an emergency action, the Securities and Exchange Commission has frozen the assets and received the green light from a federal judge to appoint a receiver to stop a real estate investment scheme in New York that has allegedly taken millions of dollars from senior citizens and retirees since 1996.
The commission’s complaint, filed in the Western District of New York, charges Edward “Ted” Tackaberry, Mark Palazzo and several related real estate investment companies, including Pittsford Capital Mortgage Partners, LLC, with making fraudulent solicitations and misappropriating investor funds.
From 1996 to 2004, Tackaberry and Palazzo raised $15 million in unregistered transactions from at least 275 investors by issuing promissory notes in various real estate investment companies all owned by Tackaberry and Palazzo, the Commission claims. The men promised returns of nine to 12 percent in real estate deals but actually invested the money in companies they owned including a failed cellular phone company they owned.
The defendants reportedly targeted Eastman Kodak retirees because of the two men’s previous employ with a money manager who used to work at Kodak.
Michael Latini, Communicate Wireless, LLC, and Monroe Wireless, LLC were also charged as relief defendants. A relief defendant is not accused of wrongdoing but has allegedly received ill-gotten gains and does not have a legitimate claim to them.
Published reports indicate that Pittsford Capital Group was founded by Tackaberry and Palazzo in 1994. Pittsford Capital Mortgage Partners Fund reportedly was an investment from Pittsford Capital Group and managed by Palazzo until he was brought out by Tackaberry in spring 2005. Tackaberry then took over as manager of the fund.
The SEC is also seeking orders forbidding the defendants from committing future violations of federal securities laws and a final judgment ordering the defendants to pay civil penalties and to return the investors’ money.
“This case emphasizes the SEC’s commitment to protecting elderly investors and to holding accountable those who defraud senior citizens of their savings,” Mark K. Schonfeld, director of the commission’s northeast regional office, said in a written statement.
Tackaberry and Palazzo could not be reached for comment. No phone listing or web site could be located for Pittsford Capital Mortgage Partners or Pittsford Capital Group.
