Loles Gets 25 Years for Swindling

By Evan Lips, New Haven Register

HARTFORD, CT – A  Ponzi scheme artist who defrauded an Orange church out of roughly $2 million while making off with a total $27.2 million in additional fraudulent deals was sentenced Wednesday to serve 25 years in prison.

U.S. District Court Judge Alvin Thompson did not buy the tearful, rambling apology Gregory P. Loles delivered to several victims in attendance at Wednesday’s sentencing as he let Loles know he “is the most sinister defendant I have ever sentenced for this category of crimes.”

Loles’ sentencing was originally slated for Monday, but an 11th hour round of questioning from Assistant U.S. Attorney Michael S. McGarry about a scheme in which Loles made off with $14 million from a family in Greece took up an entire day.

The majority of victims who expected Loles to be sentenced on Monday were unable to be present Wednesday due to work or personal commitments, according to McGarry.

“What he did wound up ruining lives like a cancer eats away from someone’s insides,” McGarry said in his statement. “This is a man who earned people’s trust, and they could not see the trouble coming.

“A true wolf in sheep’s closing.”

McGarry’s comments came after Loles’ attorney, Jeremiah Donovan, asked Thompson to impose a lenient sentence of not more than five years, arguing that white collar crimes such as those committed by his client only deserve “a touch of jail.”

“Going to jail is the greatest shame,” Donovan said. “I’d place myself in the position of the taxpayers — what are they getting for that $50,000 it takes to incarcerate him each year?”

Donovan noted that in the Internet age it is “impossible” for a man like Loles to commit such crimes again, since his name pops up in countless news reports of fraud. He added that the crumbling of Loles’ life, where he has lost not only every penny but also his relationship with his family, is enough of a deterrent.

Loles used his time to speak in court to address the victims seated behind him. Instead of addressing Thompson, Loles stood and turned, apologizing for his actions, pausing several times to dab tears from his eyes. Loles’ voice cracked as he talked about Monday morning, they day he was transported from the Wyatt Detention Facility in Rhode Island to Hartford.

“That morning, for the second time in my life and for the first time since I was 12, I took the sacrament of confession,” Loles said. “I’ve always been very concerned about getting it right with God and what happened at St. Barbara’s.”

His reference to St. Barbara Greek Orthodox Church, the parish of many of his victims, was not lost on Thompson, who pointed out that Loles used the church as a tool to dupe investors.

One victim, Herman Solomon, spoke on Monday. Solomon recalled how Loles’ actions were not done at random.

“I am 78 years old,” Solomon said. “You (Loles) were able to see soft spots in personalities and I know in my case, that was a factor.”

Solomon said he invested his money with Loles in part to help create a scholarship fund.

“I was a welfare child growing up,” Solomon said. “I wound up working hard, getting a doctorate in chemical engineering, and I wanted to give back.

“He knew that.”

After Loles finished his statement, vowing that if he can, he’ll pay back every dollar he stole, McGarry noted that the time for truthfulness had passed.

“He said in his apologies that he doesn’t know the word for what he did, but I think the words are ‘obstruction of justice,’” McGarry said, referencing the fact Loles took the stand on Monday and argued that the $14 million that belonged to the family in Greece rightly belonged to him.

“The time to tell Mr. Solomon the truth was back in 2001,” McGarry added.

Thompson said in his sentencing statement that Loles “willfully” misled the court regarding his testimony about the $14 million and tried to obstruct investigators by making false statements to the FBI.

The charges Loles pleaded guilty to on July 26, 2011, included one count each of mail fraud, wire fraud, securities fraud and money laundering. Court documents indicate that the money Loles took was used to pay for an extravagant lifestyle, which included a mansion, tennis court and multi-car garage, in addition to helping to cover losses incurred by his Danbury-based Farnbacher Loles race car venture.

U.S. Attorney Deirdre Daly said in a prepared statement that the long sentence imposed by Thompson is “clearly appropriate as the defendant preyed upon and devastated innocent victims who had placed their trust in him.”

Solomon, one of more than 50 victims, said it was “not my business to make that judgment” when asked after the proceedings whether he thought a 25-year sentence was enough. St. Barbara’s Rev. Peter Orfanakos echoed Solomon’s comments, adding that he placed his trust in the justice system to impose the appropriate sentence.

Greg Stamos, an Ansonia attorney who serves as counsel to St. Barbara’s, said “no sentence can quantify the devastation that accompanies a loss of trust.”

Loles, 54, will receive credit for time already served. He has been incarcerated since Dec. 15, 2009. Upon his exit from prison, he must serve three years of supervised release.