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Westchester Man Pleads Guilty to Defrauding Victims in $1.3 Million Investment Scam

Charles Principato of Rye ran a scheme where he convinced investors they were putting their money into "infomercial" advertisements, according to the United States Attorney's office in Connecticut.

Rye resident Charles Principato, 52, pleaded guilty this week in federal court in connection with an investment scam that defrauded victims of $1.3 million, according the Connecticut United States Attorney Deirdre M. Daly.

Between January 2011 and February of this year, Principato ran Prince Direct, Inc., which fooled investors into believing the company marketed products through "infomercials."

Instead of going toward the business, the money Principato raised was used for "his own personal expenses, including for vacations and home renovations, and for gambling," according to Daly.

Principato pleaded guilty to one count of wire fraud and will be sentenced in October. He faces a possible maximum sentence of 20 years in prison.

Principato had been arrested in 2011 on tax evasion charges.

Below is the press release from Daly's office: 

Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that CHARLES PRINCIPATO, 52, of Rye, N.Y., pleaded guilty on Monday in New Haven federal court to engaging in a scheme to defraud investors of more than $1.3 million. 

According to court documents and statements made in court, between approximately January 2011 and February 2014, PRINCIPATO acted as principal of Prince Direct, Inc., an entity that he represented to victim-investors as being in the business of marketing products through advertising such as “infomercials.”  PRINCIPATO solicited money from victims, including Connecticut residents, for the stated purpose of funding the business operations of Prince Direct.  However, instead of using victims’ money for the stated purposes, PRINCIPATO used it for his own personal expenses, including for vacations and home renovations, and for gambling.  Through this scheme, PRINCIPATO defrauded victim-investors of more than $1.3 million.

On June 23, 2014, PRINCIPATO waived his right to indictment and pleaded guilty before Chief U.S. District Judge Janet C. Hall in New Haven to one count of wire fraud.  Judge Hall scheduled sentencing for October 7, 2014, at which time PRINCIPATO faces a maximum term of imprisonment of 20 years.

PRINCIPATO is currently released on a $250,000 bond.

This matter has been investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant U.S. Attorney Susan L. Wines.

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