Sentenced to 41 months; also ordered to pay $845K in restitution to 11 victims
By Denise Richardson
A former Unadilla man who defrauded investors of nearly $1 million has been sentenced to 41 months in prison, the prosecuting lawyer said Thursday.
David Lippa, 39, also must pay $845,000 in restitution to 11 victims named in the case, said Thomas P. Walsh, assistant U.S. district attorney in Binghamton.
On June 6, Lippa pleaded guilty in U.S. District Court for the Northern District of New York in Binghamton to two counts of committing a security violation and two counts of money laundering.
[an error occurred while processing this directive]Paul Ruffo, investigator with the state Insurance Frauds Bureau in Oneonta, said Thursday he was glad that Lippa was sentenced to prison time but happier that he has to make payments to victims.
Walsh said based on sentencing guidelines, the recommendation for Lippa was to serve between 37 and 46 months. Lippa, who starts his sentence Nov. 15 at a federal facility to be determined, also will be on supervised release for three years after his prison term, Walsh said.
Walsh said under the Justice for All Act of 2004, victims have enhanced rights to be notified about the status of a case and to speak at sentencings. During Lippa’s sentencing before Thomas J. McAvoy, senior U.S. district court judge, Walsh said he read two statements by victims and Nancy Yerdon spoke, giving a sense of the personal impact of the fraud. Yerdon said in a telephone interview Thursday night that through investments with Lippa she lost $146,000, money from her husband’s life-insurance policy. She said her husband, Frank, died in 1993.
"Mr. Lippa took everything I had," said Yerdon, 55, of Burlington Flats. "Not only did he steal my money, he stole my freedom to dream."
Her dreams include riding Amtrak across the country, traveling to Hawaii, she said, and buying a burial plot and headstone for her father, Edward Wiltse, who died Aug. 28. His body was cremated because it was the most reasonable choice financially, she said.
Yerdon said Lippa gained the trust of investors and would be enthusiastic about money being made. But then he would warn her not to tell anyone about them.
"That should have been my clue," she said.
Yerdon said she makes ends meet with retirement and disability pay. She previously worked 16 years as a licensed practical nurse at The Meadows, the former Otsego County nursing home.
Yerdon said her investments with Lippa began to sour in 2001. About a year later, and after unsuccessfully seeking legal recourse, she said, she went to the office of state Sen. James Seward, R-Milford. Chris Tauzel of Seward’s office, she said, referred her to Ruffo, who has been "steadfast from the beginning."
When reached in Newfield on Thursday night, Lippa said he didn’t want to comment without speaking with a lawyer.
Walsh said Lippa expressed a keen desire during the sentencing to make restitution to the victims.
In June, Ruffo said 10 to 12 investors in Otsego and Delaware counties were defrauded of $984,000. Lippa took $10,000, $20,000, $150,000 and $200,000 at a time, Ruffo said.
For instance, Lippa would provide a certificate for one share of LFG Financial Group for an investment of $10,000, Ruffo said, and Lippa paid initial investors quarterly income so that he could gain recommendations and attract other investors.
Lippa ran the business in Unadilla from late 1999 to September 2001 and had 10 to 12 employees, Ruffo said.
Walsh credited work of Ruffo and Kinsey Koop of the state police Special Investigation Unit in Binghamton with successfully providing data for the prosecution.
Ruffo previously said the investigation involved interviewing victims and employees and reviewing bank records. Ruffo said he and Koop also interviewed Lippa, who confessed after being presented with evidence.
Lippa used investors’ money for personal belongings, including a house, cars and a houseboat that were repossessed for amounts due, authorities said.
Walsh said Lippa was represented by Lisa Peebles, an assistant federal public defender.