Ex-Middletown Fire Chief In Trouble Again; Feds Say He Ran Ponzi Scheme

MIDDLETOWN, NJ - The former Middletown fire chief-turned-investment-banker is in trouble again, now accused of dipping into one pool of investor money to pay back clients of another, U.S Attorney Paul Fishman said Friday. Last year, Vincent P. Falci was ordered by the state of New Jersey to pay back $6.7 million in restitution to his clients, many of whom are local firefighters and police officers. Falci used to serve as the Middletown fire chief, and he and his wife still live in Middletown. He often touted his investment skills and experience to gain clients, 182 of which lost money in that scam, the state said.

But today, in a separate new complaint, he's accused of dipping into a separate investor fund to not only pay back those 182 clients, but also to enrich himself and his family, the feds say. He is scheduled to appear in federal court at 2 p.m. Friday to face charges that he fraudulently concealed investment losses and diverted at least $5.3 million in investor money for his personal use.

It started in the late 1990s or early 2000s, when Falci created a collection of investment funds called The Saber Funds. He opened up an office in Middletown and drew on his prominent position in the community to attract clients. He assured clients that the funds were conservatively invested in securities such as tax liens and that the fund’s investments continued to show positive returns. Falci promised investors a 7 percent return rate, based on fake, prior-year results, the feds say. Investors believed him.

But in reality, Falci redirected investor money to a number of riskier ventures, such as day trading and real estate, federal investigators say. Many of these investments lost money, which Falci hid from his clients. As Patch reported at the time, on Sept. 18, 2015, Falci entered into a consent order with the N.J. Bureau of Securities, in which he admitted to violating New Jersey securities laws while operating the Saber Funds. His wife Donna Falci, and their son, Vincent N. Falci, of Wall, were both named in that complaint. In that consent order, he admitted to misleading investors and paying himself and family members over $1 million between 2006 and 2009. At the time, he was required to pay a restitution of $6.7 million.

In order to pay back that restitution, Falci stole money from the Vicor Fund, which he controlled through his management entity “Vidon Capital Partners LLC” (Vidon), feds say. Even after the September 2015 consent order required Falci to divest himself from all funds and management entities, he continued to steal money from the Vicor Fund and Vidon bank accounts, the feds say.

Altogether, Falci allegedly stole $5.3 million from the Vicor Fund between January 2015 and May 2016, AG Fishman charges. While most of that money was used to repay prior investors in the Saber Fund, Falci siphoned over $500,000 to himself and family members.

He has been was charged with two counts of wire fraud and one count of securities fraud. He is scheduled to appear Friday afternoon before U.S. Magistrate Judge Steven C. Mannion in Newark federal court. He's already been permanently banned from working in the securities industry in New Jersey.

Past Patch coverage on Vincent Falci:

Middletown Couple, Son Must Pay $6.7 Million To Defrauded Investors, State Says