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Politics

Greek Church Defrauder Gets 25 Years

A Connecticut man who pleaded guilty in a fraud case in which prosecutors said he stole $27 million from investors, his own Greek Orthodox Church and a family in Greece was sentenced to 25 years in prison and three years of supervised release.

Gregory P. Loles, 54, formerly of Easton, Conn., had been detained since his arrest on Dec. 15, 2009. On July 26, 2011, he pleaded guilty to one count of mail fraud, one count of wire fraud, one count of securities fraud and one count of money laundering. He was sentenced Feb. 26 by U.S. District Judge Alvin W. Thompson in Hartford.

“For nearly a decade, this defendant abused the trust of friends and clients, and stole millions from his own church.” Deirdre M. Daly, United States Attorney for the District of Connecticut, said in a statement.

“He engaged in a carefully calculated fraud that included the use of sham companies, phony documents and endless lies to investors. His scheme was for his own material gain, including the purchase of an extravagant home and the funding of a professional car racing team. This long sentence is clearly appropriate as the defendant preyed upon and devastated innocent victims who had placed their trust in him.”

Loles falsely represented to numerous victim-investors, including friends and fellow parishioners of St. Barbara’s Greek Orthodox Church in Orange, Conn., that he would act as their investment adviser and invest their funds through Apeiron Capital Management Inc., which he owned.

He was to invest the funds in various securities including “arbitrage bonds,” which he represented would provide investors with a safe and steady return.

Loles also was selected to serve on the board of the church’s endowment fund and was entrusted to manage the church’s investment funds, including the endowment fund and the building fund, by investing in, among other things, arbitrage bonds. However, the arbitrage bonds did not exist.

Some of the individual investors lost their life savings, and provided Loles with funds that had previously been invested in IRAs, 401(k)s, or were proceeds of life insurance payments, the Easton Courier reported.

Patricia M. Ferrick, special agent in charge of the New Haven Division of the Federal Bureau of Investigation said that the sentence “will hopefully deter investment advisors and other financial services professionals from defrauding their investors.

“For years, the defendant systematically swindled numerous victims, including friends and fellow parishioners, of approximately $27 million dollars,” Special Agent Ferrick said.

“While most of the details of his heartless frauds have been uncovered, the depth of the destruction of trust and faith may never be fully revealed. Unfortunately, this is an all too common occurrence and another reminder to investors to do your due diligence before investing with anyone.”

Paperwork filed by the government said Loles may have had as many as 250 victims in his scheme.

“Most recently he had the temerity to testify under oath that $14 million of funds that he took from a Greek family, after the father of that family had unexpectedly died, was in fact his money,” states the memorandum.

Loles’ alleged swindling of the Greek family, especially the estate of the late John Missailidis, was at the heart of testimony, the New Haven Register reported.

Loles took the witness stand and described how he ingratiated himself within the Missailidis family and ultimately won the trust of the family’s patriarch. Loles spoke of how the elder Missailidis formed several small holding companies, all aimed at supporting a lucrative medical device business.

The company at the heart of his testimony, the London-based medical device company Smith & Nephew Inc., sold medical devices to Greek state-run hospitals, Loles explained.

After Missailidis died, a $14 million sum was transferred into Loles’ Apeiron Capital, the institution he ran out of his Easton mansion.

“I put myself in this position,” Loles told the court. “If I had the money I’d 100 percent give it to the victims.” The $14 million, whoever it truly belonged to, is all gone, allegedly spent by Loles to fund a lavish lifestyle that included owning a Porsche race car company.

 

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