A former soccer club president will spend the next 51 months in federal prison after pleading guilty to operating a Ponzi scheme that took in at least $5 million from investors, including fellow members of the soccer club. Robert Rocco, 48, received the maximum sentence after previously pleading guilty to a single count of wire fraud. Rocco was previously indicted on five counts of wire fraud and nine counts of mail fraud. In addition, the government is also seeking forfeiture of all proceeds traceable to the fraud, including Rocco's New York house.
According to the indictment, Rocco was the president of the Dix Hills Soccer Club ("DHSC"), which allowed him exclusive control of the club's bank accounts. Rocco was also the founder and owner of Limestone Capital Services ("Limestone"), which purported to provide wholesale financing of cigarette purchases for a tobacco shop located on the Shinnecock Native American Reservation (the "Reservation"). Limestone also allegedly provided credit card services to retail users seeking to purchase cigarettes from the Reservation.
Beginning in 2006, Rocco solicited friends and family members of the DHSC to invest in Limestone, representing that investor funds would be used to finance the wholesale purchase of cigarettes on the Reservation. Investors were provided with promissory notes that stated annual rates of return ranging from 15% to 18%. Rocco also solicited the assistance of an unnamed acquaintance to recruit additional investors. In total, over two dozen investors entrusted amounts ranging from $25,000 to $1.2 million with Limestone for a collective investment of over $5 million.
While investors received regular checks purporting to be interest payments, Rocco revealed in February 2009 that a rival Indian tribe had stolen approximately $4 million - $5 million of uninsured cigarette inventory from the Reservation, resulting in a massive loss. Rocco then formed Advent Equity Partners ("AEP"), which purported to deal in credit card processing services, and solicited a total of $1.3 million from an unnamed victim.
According to authorities, Rocco was not able to pay his advertised returns through legitimate businesses such as Limestone or AEP, but rather used incoming investor funds to pay returns to existing investors in classic Ponzi scheme fashion. In addition, Rocco is accused of diverting nearly $67,000 from DHSC bank accounts to cover redemption obligations to investors. This had the effect of depleting club coffers, with DHSC managing to stay afloat only by soliciting donations from benefactors.
Rocco's indictment is below: