Ex-Middletown Fire Chief Gets 15 Years In $10M Ponzi Scheme

MIDDLETOWN, NJ — The former Middletown fire chief who stole millions from investors, including other firefighters and from police officers, in a Ponzi scheme has been sentenced to 15 years in prison, the U.S. attorney's office announced.

Vincent P. Falci, 59, of Middletown, was convicted in December of three counts of wire fraud and one count of securities fraud after a two-week trial before U.S. District Judge Anne E. Thompson, who imposed the sentence Wednesday in Trenton federal court.

Falci, an investment manager, created and controlled a number of investment funds under the names Saber Funds and Vicor Tax Receivables LLP. The Saber Funds were a created and operated in the early 2000s and grew to have more than 200 investors, including police officers, firefighters and first responders. Many of his earliest victims were friends, family, and associates, U.S. Attorney Craig Carpenito said.

Falci told investors that the Saber Funds were conservatively invested in tax liens – which generated high returns with little risk. In reality, he diverted investor money to himself, his family, and to other companies he controlled. Some of the diverted funds were used for riskier ventures, such as day trading and real estate, Carpenito's office said.

Falci concealed losses and his own theft from investors, and in early 2012, started the Vicor Fund, targeting wealthier investors with greater sophistication in financial affairs. The investors in the Vicor Fund included financial industry professionals, and Falci ultimately raised $20 million from these victims, Carpenito said. He again falsely represented that he had experience and a track record of success investing in tax liens, and promised that he could produce high rates of return with little risk.

In reality, the assets of the Vicor Fund were rapidly depleted by Falci’s theft. In order to support his own lifestyle and repay investors the gains he had promised, Falci stole more than $10 million from the Vicor Fund between 2012 and 2016, Carpenito said. At the same time, he reported fake investment gains to his investors on every monthly statement. Falci concealed his theft in several ways, including by diverting funds to a fake company that he created to steal from investors. He also forged emails and reports, and created fake assets for the fund.

Investigations into the fraud first became public in 2014, when the New Jersey Bureau of Securities announced it had filed suit against Falci over his scheme. He later agreed to repay $6.7 million under a state consent order.

In the federal case, Thompson also sentenced Falci to three years of supervised release, with restitution and forfeiture to be determined at a later date.

U.S. Attorney Carpenito credited inspectors of U.S. Postal Inspection Service, under the direction of Inspector in Charge James V. Buthorn, with the investigation leading to today’s verdict. He also thanked the N.J. Bureau of Securities in the State Attorney General’s Office, under the direction of Attorney General Gurbir Grewal and Bureau Chief Christopher Gerrold, for its assistance in the investigation.

The government is represented by Assistant U.S. Attorneys Justin Herring, Chief of the Cybercrimes Unit, and Paul A. Murphy, Chief of the Economic Crimes Unit, of the U.S. Attorney’s Office Criminal Division in Newark.