Publication: The Day

Published 10/21/2010 12:00 AMUpdated 10/21/2010 11:55 AM

http://www.theday.com/article/20101021/NWS02/310219367/-1/NWS

Hartford - F. Robert LaSaracina, the certified public accountant accused of defrauding a Norwich estate of millions of dollars and inducing clients to invest in murky business deals, appeared Wednesday in U.S. District Court after his arrest on a criminal complaint charging him with mail fraud, wire fraud and money laundering.

U.S. Magistrate Judge Donna Martinez released LaSaracina on a $500,000 bond co-signed by family members and ordered that he avoid any casino and submit to an evaluation to determine whether he has a gambling addiction.

LaSaracina, 59, must surrender his passport by noon Friday, may not leave Connecticut and may not have contact with potential witnesses in the prosecution of the charges against him, which stem from an alleged scheme to defraud investors. He must also refrain from the excessive use of alcohol and drugs and have authorities review any proposed financial transactions of more than $500.

The graying LaSaracina, whom federal agents arrested at his Norwich office, appeared in court in an open-collar dress shirt and said little. Members of his immediate family, including his wife, Cheryl, sat on a bench behind him and his attorney, Benjamin Adams of Santos & Seeley, a Hartford law firm. When a reporter approached outside the courtroom, Adams said the family would have no comment.

Also Wednesday, LaSaracina's Norwich attorney, Mark Block, filed a Superior Court appeal of a state Probate Court finding that LaSaracina "willfully mismanaged" nine Kauppinen family trusts from 1997 to 2009 and owes the trusts more than $4.2 million.

An affidavit filed in support of the federal charges against LaSaracina remained sealed Wednesday. In court, Assistant U.S. Attorney Nora Dannehy, who is prosecuting the case, told the judge that LaSaracina devised and executed a scheme to defraud investors by using investment funds entrusted to him to pay personal and business expenses. It's also alleged that he used funds from more recent investors to make "lulling payments" to earlier victims of his scheme.

Martinez set a probable-cause hearing on the charges for Nov. 10. If a grand jury returns an indictment against LaSaracina before then, there will be no hearing, she said.

Three longtime clients of LaSaracina have brought civil suits against him in New London Superior Court, alleging that he induced them to invest in an "undisclosed individual or business" that he never identified. In a suit filed in December, Steven Grob of Stonington accused LaSaracina of failing to repay Grob's $50,000 investment. The parties have agreed to a repayment schedule.

In a suit filed in August, Lisa Andersen of Canterbury made a similar claim against LaSaracina, alleging he defaulted on the repayment of her $150,000 investment.

Last month, George Kennedy of Jewett City, whom court documents identify as a childhood friend as well as a longstanding client of LaSaracina, sued, alleging LaSaracina had defaulted on $100,000 in investments he had induced Kennedy to make.

LaSaracina has not responded to the Andersen and Kennedy suits, citing his Fifth Amendment privilege against self-incrimination.

He took a similar tack during a hearing last month in the Norwich probate matter. He did the same when he was called to testify in a New London Superior Court case involving Sovereign Bank's ultimately successful claim that Michael Thomas, former chairman of the Mashantucket Pequot Tribal Council, had defaulted on a $5.2 million line of credit. LaSaracina testified to handling some of Thomas' finances.

LaSaracina has other legal entanglements.

The Mashantuckets' Foxwoods Resort Casino sued him last month over an outstanding gambling debt. Both his place of business at 209-211 West Town St. and his 6,500-square-foot home on Case Street in Norwich are in foreclosure. The West Town Street property, owned by Cheryl LaSaracina, is scheduled for a foreclosure sale in January, while the parties in the home foreclosure are in mediation, according to court records.

In addition, Linda Kidder, the Waterford attorney appointed conservator of the Kauppinen family trusts, has filed a malpractice suit over LaSaracina's handling of the estate.

In his appeal of the Probate Court ruling, Block, LaSaracina's lawyer, claims the court "abused its discretion" when it denied LaSaracina's request for a continuance due to the federal investigation. Block contends that LaSaracina was unable to defend himself in the probate matter because he had to invoke his Fifth Amendment right against self-incrimination and because the FBI had seized documents from his office that were "necessary for his defense."

The mail- and wire-fraud charges carry a maximum prison term of 20 years, and the money-laundering charge carries a maximum term of 10 years. The federal investigation, which is ongoing, is being handled by the FBI, the Internal Revenue Service-Criminal Investigation and the state Office of the Chief State's Attorney.

Any victims or other individuals with information about the alleged scheme are encouraged to contact the FBI at (203) 777-6311.

Editor's Note: Federal authorities who arrested Norwich accountant F. Robert LaSaracina on a criminal complaint charging him with mail fraud, wire fraud and money laundering did not say the charges were linked to his mishandling of a Norwich estate. An earlier headline on this story was incorrect.