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Alleged Ponzi Schemer Faces New Loan-Sharking Charges

A Massachusetts man already accused of orchestrating a multi-million dollar Ponzi scheme with his wife faced new charges of loan-sharking after he was arrested at a gas station with thousands of dollars stuffed in his pockets after he allegedly sought to collect a 40% return on an investment previously made by his company.  Steven Palladino, 57, was arraigned on a single count of usury after prosecutors alleged he contacted a woman demanding the repayment of a loan he previously made through his business that featured an interest rate wice the maximum allowed under Massachusetts law. As Palladino was already out on bail on more than one dozen charges, Judge Michael Cayne granted a request by prosecutors to impose an additional $25,000 cash bail. 

According to authorities, Palladino and his wife, Lori, owned and operated Viking Financial Group ("Viking") along with their 28-year old son.  Potential investors were told that Viking profited by making loans that carried exorbitant interest rates.  However, Viking made very few loans, and of these loans, many were made in violation of a state statute prohibiting loan interest rates exceeding 20%.  Indeed, three of the loans extended in 2007 and 2008 carried interest rates exceeding 60% - resulting in three charges of usury.

The Palladinos attempted to evade suspicion by falsifying company books and records to make it appear as if Viking was making legitimate loans.  However, in reality, investor funds were used primarily to sustain a life of luxury for the couple that included Bahamas trips, rent for Steven Palladino's mistress, and hundreds of thousands of dollars in gambling losses.  Additionally, nearly $400,000 in investor funds were used to satisfy a condition of Steven Palladino's probation stemming from a 2007 conviction for, ironically enough, defrauding an elderly relative.  

Palladino and his wife were indicted in March on numerous charges including four counts of larceny over $250, three counts of making false entries in corporate books, and three counts of usury, commonly referred to as loan sharking.  Due to his lengthy criminal record that featured more than 24 prior larceny convictions, Steven Palladino was charged as a 'common and notorious thief'.

The new charges allege that, even after his arrest in March, Palladino had been recently contacting a Massachusetts woman to seek a $30,000 payment for a $25,000 loan she received from Viking back in March.  While Massachusetts law prohibits the making of any loan carrying more than a 20% annual interest rate, the payment demanded by Palladino would have equated to a 40% annual return - double the rate allowed under law.  Palladino was subsequently apprehended at a local gas station with nearly $5,000 in cash in his pockets and driving a $100,000+ Mercedes.   

Palladino is also expected to face charges for allegedly transferring the title of several vehicles he owned solely or jointly with his wife to that of his wife's name alone.

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