October 31, 2009  http://www.courant.com/news/connecticut/hc-blown-savings-1031.artoct31,0,5373067.story

A Waterbury investment adviser admitted in federal court Friday that he swindled as much as $1.8 million from his clients and lost most of it gambling at casinos in Connecticut.

Thomas Cipriano, 54, an insurance agent and financial adviser who operated the Cipriano Agency and the Selective Benefits Group in Waterbury, pleaded guilty to one count each of mail fraud and money laundering before Senior U.S. District Judge Peter C. Dorsey in New Haven.

Cipriano is accused in a federal indictment of persuading clients to remove savings from conventional investments or savings accounts after promising them that he could guarantee the principal and obtain higher rates of return.

In reality, federal prosecutors said, Cipriano placed much of the money in his personal bank accounts and used most of it for personal expenses, the bulk of which grew from his gambling habit. Cipriano used some of the client funds to make "lulling payments," payments designed to deceive clients into believing their money had been placed in legitimate, income-generating, investment instruments.

When he is sentenced Jan. 18, Cipriano faces up to 20 years in prison on the fraud charge and up to an additional 10 years for money laundering. He also faces hundreds of thousands of dollars in criminal fines and could be ordered to pay restitution.

Federal prosecutors would not identify Cipriano's victims and estimated their losses at between $1.3 million and $1.8 million.

Cipriano advertised in the Waterbury area and ran seminars to attract clients.
Prosecutors said he convinced one of his seminar clients that he could beat the rate of return the client was earning on an insurance company annuity. The client instructed the insurer to turn over $49,000 to Cipriano.

On March 5, 2005, Cipriano divided the money between two personal bank accounts and kept about $5,500 in cash. Later in the day, he spent $21,000 gambling at the Mohegan Sun casino in Montville, according to the indictment against Cipriano.