A 70-year-old Bergen County con man who admitted duping people into handing over money he and a partner used to cover more than $10 million in payroll taxes was sentenced to five years in federal prison today.
In addition to the prison term, U.S. District Judge Jose L. Linares ordered Paul Bultmeyer, of Upper Saddle River, to repay $8.6 million.
Bultmeyer earlier admitted that he and accomplice Arthur Piacentini created a sham firm, Sherbourne Capital, to lure investors — mostly retirees — whose money they then used to bail out AmeriPay, their Rochelle Park payroll company.
They also operated Equitair, a jet-chartering company also located in Rochelle Park.
The partners established Ameripay in 1996 to handle payroll services for various private companies and public entities throughout New Jersey, issuing payments to the IRS on their behalf.
But the partners eventually found themselves unable to fulfill their obligations — to their clients or the government. So in 2004, records show, they created Sherbourne Capital Management, Ltd.
In less than five years, they diverted nearly $10.2 million through the scheme, federal authorities said.
Sherbourne Financial advertised itself on the web as “Your Retirement Income Specialist,” according to the United States Security and Exchange Commission, which also brought charges against both men.
The Sherbourne clients were told that their money was being invested under a diversified strategy, with protection. The investors were never given specifics — and, in some cases, received “interest” through cash diverted from other clients.
Had the investors taken the time to look, they’d have discovered that the company never registered with either federal or state regulators to sell any kind of investments.
Piacentini pleaded guilty to the conspiracy before Linares on May 5 and has been awaiting sentencing pending the outcome of Bultmeyer‘s case.
U.S. Attorney Paul Fishman credited special agents with the FBI for making the case and thanked the U.S. Securities and Exchange Commission’s New York Regional Office for its assistance.
Assistant U.S. Attorney Justin W. Arnold of the U.S. Attorney’s Office Economic Crimes Unit in Newark handled the case.
It was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, created “to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes,” Fishman said.
The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement. Working together, they “bring to bear a powerful array of criminal and civil enforcement Resources,” the U.S. Attorney said.
No one has provided an official count, but there have been dozens of similar con men led through the federal halls of justice in Newark, Camden and Trenton since Fishman became New Jersey’s top federal prosecutor.