N.Y. men ordered to pay $12 million for defrauding seniors

Bryan Roth

Two men have been ordered to pay about $11.7 million plus $75,000 in civil penalties by the U.S. Western District Court of New York  for their role in a real estate defrauding scheme. They mainly targeted senior citizens and retirees.

Edward "Ted" Tackaberry and Mark Palazzo, the heads of Pittsford Capital LLC, were charged with running a fraudulent promissory note scheme, raising at least $15 million from no less than 275 investors, according to a report by the U.S. Securities and Exchange Commission. A judge presiding over the case found that the two men distributed more than $4.4 million in unauthorized and undisclosed loans.

The findings state that between 1996 and 2004, the two men raised the money in unregistered transactions by issuing promissory notes in various real estate companies, all of which were owned by Tackaberry and Palazzo.

The SEC charged both men with making numerous misrepresentations and omissions to investors regarding their investments and the company's financial condition. The SEC said Tackaberry and Palazzo also failed to disclose large amounts of money that was transferred to other entities, including $2.4 million to Communicate Wireless, which both men had interest in.

Other accusations included:

- Making and failing to disclose transfers of money to Palazzo.

- Failing to disclose that they combined the real estate investment companies' assets in one bank account to fund the operations of other real estate investment companies.

- Falsely claiming that the real estate companies would retain an independent third-party agent to represent investors' interests in connection with offerings.

In July 2006, the SEC was able to freeze the men's assets and appointed Lucien Morin, a Rochester-based bankruptcy lawyer, as receiver in the case.

Bryan Roth can be reached at (585) 394-0770, Ext. 270, or at broth@mpnewspapers.com.