BOSTON, Oct. 18, 2013—A West Roxbury couple and their son were each arraigned today on charges of operating a Ponzi scheme that bilked investors of more than $10 million, District Attorney Daniel F. Conley said.

STEVEN PALLADINO (D.O.B. 9/11/57), LORI PALLADINO (D.O.B. 2/17/61), GREGORY PALLADINO (D.O.B. 3/7/85), and the company the family operated – VIKING FINANCIAL GROUP – were arraigned in Suffolk Superior Court this morning on one count each of larceny over $250, larceny over $250 from a person over 60.  Steven, Lori, and Gregory Palladino were each additionally charged with conspiracy to commit larceny.  Gregory Palladino faced additional charges of withholding evidence and three counts of usury.

Steven Palladino was also arraigned on one count of usury for which he had previously been arraigned in West Roxbury District Court.  The indictment moves the case to Superior Court, where it will be adjudicated.

At the request of Assistant District Attorney Benjamin Goldberger, Clerk Magistrate Gary Wilson ordered that Steven Palladino’s bail remain at $25,000, which was posted after his arraignment in West Roxbury District Court, and released Lori and Gregory Palladino on their own recognizance.

According to prosecutors, the Palladinos operated a Ponzi scheme through their company, Viking Financial Group, which Lori and Gregory Palladino incorporated in 2007.  The three family members are the company’s sole employees.  The Palladinos are accused of borrowing money from investors who believed that the funds would be used to provide high-interest loans, prosecutors said.   Very little of the funds were used to make loans, and the loans that were made often bore interest rates above the maximum 20 percent interest rate allowed under state law, prosecutors allege.

Steven and Lori Palladino allegedly entered fake loans into Viking’s corporate books to make them appear balanced, prosecutors said.

In all, prosecutors allege that the defendants defrauded 42 individuals, families, and groups of between $10 million and $13.8 million.  The Palladinos transferred those funds from corporate accounts into private accounts and using it to fund a lavish lifestyle, including luxury vehicles, a vacation to the Bahamas, and casino trips resulting in apparent gambling losses totaling hundreds of thousands of dollars, prosecutors said.

In addition to the charges the defendants were arraigned on today, Steven Palladino, Lori Palladino, and Viking Financial Group each face earlier charges related to the same Ponzi scheme.  The current indictment supersedes the earlier larceny indictments and charges Gregory Palladino for the first time for his alleged role in the scheme.  It also reflects more victims and greater losses.

The earlier indictment charges Steven and Lori Palladino with two counts each of uttering a false document and tampering with evidence and three counts each of making false entry on corporate books and usury.  Steven Palladino was additionally charged as a common and notorious thief.  Viking was charged with one count of tampering with evidence, two counts of uttering, and three counts of usury.

Each of the defendants was represented by Phil Tracy.  All are due to return to court on Dec. 8.

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All defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.