BOSTON, Jan. 21, 2014—Three members of a West Roxbury family today pleaded guilty to orchestrating a Ponzi scheme that funneled more than $10 million from their victims that was used to fund a lavish lifestyle, District Attorney Daniel F. Conley said today.

STEVEN PALLADINO (D.O.B. 9/11/57), his wife LORI PALLADINO (D.O.B. 2/17/61), the couple’s son GREGORY PALLADINO (D.O.B. 3/7/85), and the investment firm they operated – VIKING FINANCIAL GROUP – admitted guilt during an appearance before Judge Janet Sanders in Suffolk Superior Court today.  Steven and pleaded guilty to one count each of larceny over $250, larceny over $250 from a person over 60, conspiracy to commit larceny, and tampering with evidence; two counts of uttering a false; three counts of making false check, making a false entry in corporate books; and four counts of usury.  Lori Palladino pleaded guilty to one count each of larceny over $250, larceny over $250 from a person over 60, and conspiracy to commit larceny; two counts of uttering a false; three counts of making false check, making a false entry in corporate books; and three counts of usury.  Gregory Palladino pleaded guilty to one count each of larceny over $250, larceny over $250 from a person over 60, conspiracy to commit larceny, and tampering with evidence; and three counts of usury.  The corporate entity also entered guilty pleas on one count each of larceny over $250, larceny over $250 and from a person over 60, and tampering with evidence; two counts of uttering; and three counts of usury.

Calling him the “primary beneficiary” of the crimes, Sanders sentenced Steven Palladino to 10 to 12 years in state prison, followed by a period of five years probation during which he must pay restitution.  Lori Palladino was sentenced to two years in the house of correction, suspended for a period of five years, during which time she must pay restitution.  Sanders sentenced Gregory Palladino to two years in the house of correction, as well as five years probation and ordered him to pay restitution.  Viking was sentenced to five years probation and ordered to pay restitution.  Assistant District Attorney Benjamin Goldberger of the DA’s Special Prosecutions Unit had recommended that Steven Palladino serve 12 to 15 years in prison and that Lori and Gregory Palladino each receive sentences of three to four years.

Had the case proceeded to trial, Goldberger would have introduced evidence and testimony to prove that Gregory and Lori Palladino incorporated the Viking Financial Group, Inc., in 2007.  The three family members were the company’s sole employees.  Evidence would have shown that Steven Palladino convinced upwards of three dozen investors to loan the company a total upwards of $10 million that the victims were led to believe would be used to make high-interest loans.  However, rather than making loans, the Palladinos transferred the funds into their personal accounts, the evidence would show.

Fake loans were entered into Viking’s corporate books in order to make them appear balanced and the company appear profitable.  Of the few real loans Viking extended, several charged interest rates well beyond the 20 percent maximum allowed under state law.

The defendants concealed the theft of funds by using new investments to make regular interest payments to investors and in some cases repay the principal.   Much of the funds were used to fund a lavish lifestyle, including luxury vehicles, a vacation to the Bahamas, rent for Steven Palladino’s mistress, and casino trips resulting in hundreds of thousands of dollars in losses.  Steven Palladino’s dealings with one casino chain were so extensive that the casino flew him, Gregory, and others to Atlantic City on a private jet.

In addition, Steven Palladino used the victims’ investments when he paid $350,000 to satisfy a condition of his probation on a 2007 Superior Court conviction for defrauding an elderly relative.

“Well over $10 million dollars were lost to this scam, but how do you put a price tag on your parents’ retirement account or your children’s college fund?  The true cost is incalculable,”  Conley said. “This massive loss is bad enough, but it’s made even worse by what the investments were spent on: gambling debts, luxury vacations, top-of-the line cars, five-star restaurants, and Steven Palladino’s mistresses.  There was no legitimate business: it was an out-and-out scam perpetrated by Steven Palladino and abetted by his wife and son.”

All three defendants are represented by attorney Phil Tracy.

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