Original subtitles

In this episode of American Greed, Steven Palladino runs a family ice cream

and is trusted by his tight -knit Boston neighbors.

They loved him. He was the pillar of the community.

He even lets his close friends in on a great money -making idea.

He ran a multi -million dollar financial business out of a small office over an

ice cream store.

But Palladino is hiding a dark secret.

I want to talk to you about Viking Financial.

Investors in Viking now wonder if this is a mini Madoff situation.

He needs to answer where our money is.

There's so much greed in this case. So much money.

$55 ,000 spent at the Hard Rock Hotel and Casino.

$25 ,000 on a Bahamas vacation.

And even when he's under investigation.

Palladino proves to have no shame in gutting his own community.

Your investors are out millions of dollars. What happened?

As I said, I left the closet behind.

Where's the money?

It's a different kind of criminal. He's not out shooting people.

He gets in your good graces and takes everything you got.

Boston, Massachusetts.

In the southwest corner of the city, the neighborhood of West Roxbury has a

small town feel.

Nice houses, hard -working people, a lot of cops live there, firemen.

It's a tight -knit, upper -middle -class community, and everyone knows everyone

in West Roxbury. Yes, it's in Boston, but it's a neighborhood.

And everyone in West Roxbury knows Stephen Palladino.

The 59 -year -old father of three was born and raised here in an unassuming

house on a middle -class street.

Palladino lived with his aunt and uncle Conchetta and Pasquale Falange.

They raised Stephen. Stephen was from a broken family, so they took him in and

raised him.

Palladino attends the local Catholic Boys High School and goes on to a career

finance.

becoming a registered Boston stockbroker in the early 1990s.

The story around town is that Palladino is a local boy made good, one who never

forgets his roots.

In 2008, Palladino opens the Ice Cream Works ice cream shop on West

Roxbury's main commercial drag.

Palladino's wife Lori does the books, and his sons, including 31 -year -old

Gregory, helped to man the store.

First I recall hearing about Steve Palladino when he opened his ice cream

on Fenner Street right in the major business district.

Boston District Attorney Dan Conley also lives in West Roxbury.

It was an easy walk from my house, and I took my kids down there a couple of

times for ice cream. But, you know, his reputation around town was hail fellow,

well met.

He was thought to be a good, honest businessman.

If there was a fundraising event going on, you'd pretty much rest assured Steve

Palladino would make a contribution.

And it was probably a bigger check than the average contributor might make. So

he was highly thought of by a number of folks, opinion shapers in our community.

From a small office above the store, Palladino runs a company called Viking

Financial Group.

where he's moved from stocks into bridge loans and begins taking on investors.

It was a pretty simple idea that he would make loans to businesses primarily

a rate that was higher than they would pay if they went to, say, a banking

institution of some sort. He would charge the person getting a loan from

relatively high rate and then pay his investors something less than that. They

would get a nice profit, as would he.

His partners are his wife, Lori, son, Gregory, and a local businessman named

Ernest Buzzy Nasev.

Well, Buzzy is someone that also had a pretty good reputation around town.

It appears that Palladino convinced him to the business plan that he had, and

Buzzy must have felt that this was an opportunity for him to earn a pretty

return and a safe product.

He was successful.

Now, since he then was successful, he was able to pitch the program to members

of his own family and members to his extended family and even some good and

close friends.

Dr. Ron Nassif, a retired orthopedic surgeon, is Buzzy Nassif's younger

I trusted my brother like a child trusts their parent.

My brother was in business and administration. He knew the flow of

the numbers. I was in the health care field. I knew nothing about it.

The large extended Nassif family has been a fixture in the West Roxbury

neighborhood for decades.

My family and I have lived here since the 1960s. And as we grew up, the

and would start our own families, we bought homes locally. One brother across

the street, another brother around the corner, my uncle and aunt and cousins

here. I myself just live a few streets away.

So when Buzzy Nassif presents the investment opportunity to his siblings,

and uncles, many of them get on board.

including the doctor.

I was being told that people were paying 18 to 20 percent, and his favorite

quote was, people are banging down our doors to borrow money.

Trusting that his brother wouldn't sell him on anything less than a secure

opportunity, Dr. Nasef decides to go in big.

I was recently divorced, my business was slowing down, so talking to my brother,

who I trusted as much as any man could trust another, I started liquidating

bank accounts and closing out some retirement funds, well into six figures,

my first investment.

Dr. Nasef does question why he is told to make out his initial investment check

for $600 ,000 directly to Stephen Palladino.

My brother explained by making out the checks to Palladino, it was easier for

him to roll it over into a mortgage for an upcoming borrower.

Whatever reservations he may have had are quickly calmed when the first series

of loans come due, and Dr. Nasef sees a 12 % return on his money.

Over the next three years, he puts in more than $1 million.

I was getting my interest every month, and often I was rolling it over,

up the investment. And I always had my brother reassuring me that their

was growing. Every month, we're up to $7 million. We're up to $7 .5 million. It

was very convincing.

And all my fellow family members were in it. Steve Palladino was in all our

homes. He wouldn't be defrauding us at this point. It wasn't something we even

contemplated.

When American Greed returns, Palladino's business plan seems a win -win for

everyone. But is any of it real?

He was buddies with these guys. He dines with these people. They were at his

house for a Christmas party.

They just took their money.

The house is being transferred to Steven Palladino for $100.

And the house was worth well over $50 ,000.

8 a .m. in Boston.

The city gets itself up and working, and Stephen Palladino heads to his weekday

meeting spot, the morning hub of the West Roxbury neighborhood.

Well, we're here in the center of West Roxbury, and it was at this Dunkin'

Donuts that Stephen Palladino would basically hold court every morning. Dr.

Nassif has invested more than a million dollars in Palladino's Viking Financial

Group and likes to check on his investment.

He'd be joined by one or both sons, pretty much an all -male environment.

A number of us investors, my brother Buzz often joined us. Other friends or

investors would stop by.

He knew everybody.

He would often speak about a loan he was going to do that day or about some

upcoming gala event that he was sponsoring.

There was always a way for him to make his contacts.

Dr. Nasef is so happy with his investment and confident in its

tells several friends about the plan, including Tom Dowling.

Tom, I hope you know that when I told you about this plan, I was convinced

it was a solid investment.

They made a good presentation, the two of them. Yeah.

Darling is a Vietnam War veteran who worked as a computer programmer for 30

years, saving little by little with his wife for their retirement.

We just saved and saved. Both of my parents endured the depression, as did

And in my case, my father worked three jobs so that we could live in this

neighborhood. Darling has always played it safe with his finances.

So he's especially interested when Palladino guarantees that the program is

practically risk -free.

When I listened to his pitch, it sounded sound to me. It had a solid ring to it.

The money was being loaned to contractors, mostly, who needed the

finish their projects. This was money that was invested in the area, in

tangible properties. So it was not going to disappear.

Dowling starts with an investment of $10 ,000.

Within two years, he's in for $100 ,000, his entire nest egg.

The specified interest showed up every month.

It just clicked along like a clock.

Tick -tock, tick -tock, here comes money.

Tom Dowling and Dr. Nasev aren't the only ones who think they've got a good

going.

By 2012, the West Roxbury community is buzzing with positive reviews about

Viking Financial and its ability to pay out significant interest with little

risk.

What they don't know is that precious little of their money is being loaned

at all.

And the vast majority of it is going straight into Stephen Palladino's

bank account.

Sergeant Detective Tommy Dentremont has been a Boston police officer for 27

years.

He works out of the BRIC, or Boston Regional Intelligence Center, downtown.

In 2010...

he catches a tip from an informant about a shark on the loose in West Roxbury.

We received some information that this guy, Steve Palladino, was throwing a lot

of money around and was ripping people off.

And as a result, we began an investigation.

From the outside, Stephen Palladino seems like a successful entrepreneur,

right by his investors.

Steve Palladino convinced some of these people whose homes were paid for.

To remortgage, take the equity out, and then invest in Viking Financial.

The idea being they could borrow the money, probably 4 or 5 percent, and

paying them 10.

If it's legit, it's good business.

But it wasn't.

The detective and his team learns that although Viking is a registered company,

Stephen Palladino is not listed as an officer.

Only his wife Lori and son Gregory are.

That's because legally, he can't be in charge.

Paradino is hiding a 20 -year rap sheet thick with theft and larceny charges.

In 1994, while working as a stockbroker, he was censured and fined $50 ,000 by

financial industry regulators on charges of misappropriating client funds for

his own use.

He was also hit with a felony conviction which bars him from owning a financial

business like Viking.

The most shocking find is that he is currently on probation for a felony

conviction.

This time for ripping off the woman he lived with as a child and who raised him

like a son, his aunt Conchetta.

Dentramon contacts the Boston PD case detective Mike Harper, who works out of

West Roxbury.

In 2005, Harper opens an investigation for 92 -year -old Conchetta.

She had concerns about her nephew, Stephen. He had presented her several

earlier an application, supposedly, for a local Catholic high school.

And that was for financing his son to go to that school.

He asked her if she could sign it.

And she asked him for her eyeglasses.

And he said, no, auntie, you don't need your glasses. Just sign next to my

finger. And she did. And what she in turn was signing was the quitclaim deed

the property.

And that deed said that the house was being transferred to Stephen Palladino

$100. And the house was worth well over $350 ,000.

Once in his name, Stephen Palladino proceeded to take more than $450 ,000 in

equity. out of the house.

Mrs. Falange doesn't realize what has happened until she receives a notice

her homeowner's insurance has been canceled.

It lists Stephen Palladino as the owner of the property.

She was angry about Stephen. Her and her husband, Pasquale, raised him, and she

couldn't figure out why he would have ever done anything like this to her.

From what she had told us, this was a house that was going to be willed to

Stephen Palladino's three children.

It appears Stephen Palladino wanted the house all for himself, stealing it not

only from his aunt, but from his own children.

Palladino pleads guilty in the case, receives a two -year suspended sentence,

and is ordered to pay restitution while on probation until the house is legally

backed in Mrs.

Phalange's name.

It was looked at at the time that if he was incarcerated, how would he be able

to get the monies.

put the house back in Connie's name. And by 2007, the house was back in her

name. Now the detectives investigating Palladino's Viking Financial Group are

starting to get a good idea about where Palladino came up with the hundreds of

thousands of dollars he needed to pay the court.

He stole from the aunt because he likes to steal, and then he stole from

investors to pay back probation because he got caught.

Next, the cops may have revealed Palladino was a crooked thief, but most

victims refused to believe it.

There was no cooperation.

They loved him. And that was frustrating because no victim, no crime.

In the winter of 2011, Boston PD Sergeant Detective Tom Dentremont and

of detectives are working a case on Stephen Palladino, who's taking in

of dollars from investors for his Viking financial loan company and spending

millions of dollars on himself.

He threw a ton of money around. He drove a Mercedes.

His wife had a Range Rover.

They had an Audi also. They lived in a nice house.

palatial palace. Everybody thought he's making it. His investors, like Dr. Ron

Nassif, believe their money is safe with Paradino.

I thought he was promoting his company seeking investors.

He was always looking for the next opportunity.

He even went into the Patriots, and his target was to get into the locker room

and get them to invest.

Doing things like that, and you've got your son on one side and your wife on

other, how could we not believe he was telling us the truth?

But the Boston cops are coming up with a much different picture of Palladino.

Not only does he have a long criminal history of theft and larceny, he's got a

massive gambling habit to boot.

His bank records showed close to a million dollars in mocks going to

casinos. If he's his pal, they have a jet.

If you spend a ton of money, they'll send their jet to come get you.

The team decides to put Palladino under surveillance.

to see what else he may be up to.

We were still trying to figure out who was involved, what actually were they

doing, and who were they doing it with. We actually followed him numerous times

without his knowledge, and we started to develop leads.

They follow him to his favorite restaurant, a high -end see -and -be

where the 59 -year -old Palladino holds court, spending thousands of dollars a

night, all in the company of his 20 -year -old mistress.

a former waitress there.

Took her on trips, and used to shop at a place, Hermaine.

I've never been there, but I think it's an expensive place.

We went and talked to them there, and they knew him, and he was a big tipper.

Cops trailed the couple as they drive to a waterfront condo building, where

Palladino has been paying for a luxury apartment for the mistress and

her bling and bag habits.

It was obvious that he was spending the money on himself and his lavish

lifestyle and his gambling and his girlfriend, buying cars and buying

and going to all these high -end things. And that's what he was doing, but it

was with other people's money.

Palladino also has seasoned Celtic seats and is in the process of building a

massive new home on the most expensive street in his neighborhood.

That's the house that was on the lot, right? The empty lot.

He had big dreams. Look at that.

It's got to be well over a million.

That's quite the house.

Amazing. Look at the front entrance.

Someone else was paying for it.

What could have been?

The gall, though. He's building it right in the same neighborhood as all his

victims.

With a white -collar case this big, these Boston detectives used to working

violent crime need help following the money.

They turn to the Suffolk County DA's office and lead prosecutor.

Ben Goldberger.

Based on the intelligence that they had gathered and Stephen Palladino's

criminal history, it seemed like this was something that was ripe for

investigation. It didn't add up. You didn't have enough money coming in on a

month -to -month basis to cover this business's expenses.

So we know he was buying all kinds of sports tickets, front row.

Goldberger puts together a team.

including financial analyst Ellen Kearns, who takes a hard look at

finances.

If you report yourself as an investment company, there should be something

you've invested in. Just taking a look at the flow of the money, I didn't see

any product.

What I did see was money flowing from one account to another and into casinos

and into personal type business.

Given Mr.

Palladino's history and given some of the other oddities that the financial

analyst noticed, we really began to think that this is either a money

scheme or a Ponzi scheme.

And we didn't know which.

The team sifted through Palladino's bank records until they discovered a smoking

gun.

In this case, checks forged by Palladino with investors' names and signatures on

them.

There were checks written from Viking Financial to an investor.

The back is forged, endorsed, and then Steve signs it and they put it into the

personal account. So basically they're moving the money from the business to

personal account with forged checks.

And this was the disguised money that was being moved out of the corporation.

into the personal accounts in order to make it look as if it was a return of

principle to investors, when in fact it was just a transfer of money from the

company to Stephen Palladino.

The team is now sure that Stephen Palladino is operating a scam.

In December 2012, the Boston PD seizes Palladino's bank account with more than

$600 ,000 in it.

The cops think this will put a stop to the suspected con man.

But they couldn't be more wrong.

Even after they freeze his bank account and search his office, Palladino is able

to convince an elderly couple to liquidate their retirement savings and

him with it.

He kept taking money. I mean, he knows we're out. And then a week or two later,

he went and took half a million dollars from a couple.

Paladino and his partner, Ernest Buzzy Nassif, are also making the rounds,

assuring investors that all is well.

All of them were telling us he hasn't stolen anything, the money's there, so

couldn't let go of our belief that our money was protected.

Dr. Ron Nassif, who has invested more than $1 million and whose close family

members and friends make up the majority of Paladino's investors, holds on to

hope that Paladino...

can be trusted.

Palladino went from house to house, met with every investor personally.

He came to the home of my uncle and aunt, and I was in attendance.

And he reassured us, your investments are protected.

We believed it because we wanted to believe it. Many of us had our life

with him.

Next, what's it going to take to stop a thief?

Keep spending money like it didn't happen.

You live in the high life.

Now the investment is called.

If you do something, you spend the rest of our money.

In 2012, Stephen Palladino stands accused of orchestrating the biggest

-collar fraud in Boston in 100 years.

It's but the latest crime in Palladino's long career of theft and larceny, and

Suffolk County District Attorney Dan Conley has had enough.

He dusts off an old New England statute dating back to 1804 and charges

Palladino with being a common and notorious thief, a charge that could

Palladino's sentence up to 20 years.

I'd like to give a tip of the cap to the members of the Massachusetts

legislature.

in the early 19th century when they enacted the statute of common and

thief back in 1804.

If there ever was a person who can be best described as a common and notorious

thief, it's Stephen Palladino.

Palladino and his wife Lori are also indicted on charges of larceny,

corporate books, and loan sharking.

And Palladino's son Gregory is subsequently charged with three counts

After turning himself in, Palladino makes $250 ,000 bail and

is free awaiting trial.

But instead of lying low, he decides to strike back at law enforcement by suing

them.

It is an exceptionally rare thing for a defendant to file a lawsuit against a

prosecutor or against the police department.

That was certainly my first experience with it. His lawyer, Walter Prince, also

tries to reassure Viking investors that there is nothing to worry about.

Every investor, according to my knowledge, has been paid to date. No one

lost a dime.

It was very hard for victims to accept that this investment, For some of them,

with a significant portion or all of their retirement savings, that this

investment was a fraud.

One victim spent more than 30 years working in the highest levels of law

enforcement.

He's so embarrassed he fell for Paladino's scheme, he asked us not to

identity. We were still getting paid our interest.

We were still being told, this is nothing, it'll go away.

It's just an investigation on income tax issues.

But when he was arrested and charges were made public, and then the questions

started flying, then we realized we were probably in trouble.

Meanwhile, Palladino makes no effort to change his behavior.

He's out and about flaunting his extravagant lifestyle.

But once he stops making interest payments to investors like Dr. Ron

They finally understand Palladino's true nature.

He spent our money, and that was the most frustrating part.

For us to suddenly lose our interest, for me it was my only income at the

and to see him driving around in his Mercedes with his girlfriend, going to

jewelry stores and things, it was outrageous.

This indeed truly was a Ponzi scheme.

Our money was stolen and taken from us and used for personal reasons by Mr.

Palladino and others.

Prior to a conviction, there's a limit to what the DA's office can do to stop

Palladino's spending spree.

So they bring their case to SEC attorney Dina Bernstein, who files a civil case.

So we sued Mr.

Palladino and Vikings, the company that he sort of ran, so that investors can

try to get at least some of the money back that has been taken from the fraud.

In short order, the SEC gets a federal judge to freeze all of Palladino's

and orders him to turn over all ill -gotten gains.

Problem is, once again, Palladino thumbs his nose at the system and completely

ignores the judge's orders.

Even though these assets were supposed to be frozen, he kept on spending money,

opening credit cards to use at high -end restaurants.

He took cars that were in his name, put them in his wife's name, and then got

large loans that they used to fund their lifestyle.

Viking victims are forced to stand by and watch as Stephen Palladino not only

steals their hard -earned money, but spends it in front of them.

They turned to local investigative reporter Mike Bodette, who is

intrigued by the story.

We got a call from one of the victims who said, you've got to check this guy

because he's charged with a crime, yet he's going around Boston and basically

acting like nothing's wrong.

And so we said, all right, we're going to look at this.

They ended up following him around and saw him driving in the luxury vehicles.

Here he is toweling off his Mercedes.

But that's not his only luxury car.

This is him gassing up his Audi. Going around to fancy restaurants, acting like

nothing was wrong. And that was the fear the victims had, that he was out there

spending their money.

Palladino is being monitored by a court -required ankle bracelet when Beaudet

decides to confront him.

Hi, Mr. Palladino. Mike Beaudet with Fox 25.

How are you? Good. How are you doing? We want to talk to you about Viking

Financial. I would love to talk to you, but unfortunately I can't make any

comments. Your investors are out millions of dollars. What happened?

As I said, I'd love to talk to you, but I can't. Where's the money?

You seem to be living a pretty lavish lifestyle.

There's so much greed in this case and so much money.

You have the upper middle class neighborhood in Boston where this guy is

And all these people are giving him their money.

And then to see it all disappear, it just had all the ingredients of classic

American greed.

$55 ,000 spent at the Hard Rock Hotel and Casino.

$25 ,000 on a Bahamas vacation.

A $220 ,000 wire transfer to Caesars.

Palladino may be free to go.

But what he doesn't realize is that the Boston PD has him under surveillance,

watching, waiting, concerned that Palladino may try to take the money and

I thought he was going to try to take off eventually.

He just was spending money. He was unflappable.

Next.

The suspect slips up and detectives pounce.

We pulled him out and searched him and he had $4 ,400 cash and he was on his

in town to have a night out with his girlfriend with the investment money.

Here Palladino caught on tape loan sharking at CNBCprime .com slash

Greed.

Want inside information from the show?

Join the Greed Social Network.

Like us on American Greed's Facebook page.

We'll be right back.

In September 2013,

Boston detectives are keeping a close eye on Stephen Paradino.

While the career thief has been charged with defrauding his own friends and

neighbors, he's out on bail.

and still hiding assets and spending lavishly.

Thinking he doesn't care.

He's on the bracelet. He's holding a $250 ,000 bail.

He's driving around like he won the lottery.

The cops bide their time until an increasingly desperate Paladino makes a

mistake.

He tries to collect on one of the few loans he's made, charging more than 40 %

interest.

Your note was due on August 1st. So it is past the grace period.

We'll need to speak to you to find out when I can expect a check.

Palladino gets hit with a criminal charge of usury, also known as loan

He charged a very excessive rate of interest. Under mass law, the most you

charge is a 20 % rate of interest.

Other than that, you're breaking the law.

And detectives move in, hoping to finally get the financial predator off

streets. On the afternoon of September 3, 2013,

Sergeant Detective Tom Dentremont and Detective Dave Yee stake out Palladino's

house.

An hour later...

Palladino pulls away in his Mercedes S -Class and heads toward downtown Boston.

Detective Yee and I followed him from his house on Lyle Street, and we

him out the VFW Parkway, and he pulled in here.

At the gas station, the detectives approach a surprised Palladino and tell

he's under arrest.

We pulled him out and searched him, and he had $4 ,400 cash in his purse.

And he had a check in his wallet for $3 ,400, and he was on his way in town to

have a night out with his girlfriend with the investor's money.

The man, with no shame, begs the police to let him go.

He wanted out. He said he'd talk to us if we got him out that night. And we

him, you're not going to get out tonight.

I said, why?

Why did you do this?

He said, well, you know, I was making so much money, and it got out of control.

He said it was just greed.

Until yesterday, Palladino had been a free man for months while he waits to go

on trial.

The next morning, Palladino faces arraignment on the new charges.

Reporter Mike Bodette is in the courtroom.

Steven Palladino in West Roxbury District Court, asking his family if

the $25 ,000 to bail him out. Watch again and we'll help you with the lip

reading. 25, he says, do we have it?

Also in the courtroom that day, Dr.

Ron Nason, who has become the default victim's spokesperson and who wants to

know where his million -dollar investment went.

Inevitably, he needs to answer where our money is. Where are these millions and

millions of dollars of investors' money?

While Palladino, his wife and son, all await trial, the Palladinos have filed

for bankruptcy.

And it's up to trustee Mark DiGiacomo to recover any assets they may have.

Well, there are all sorts of different kinds of assets.

There was cash that had been recovered.

There were high -end vehicles.

There's real estate.

There is also nearly $100 ,000 in gifts Palladino bought for his mistress, the

20 -year -old woman he met at his favorite high -end restaurant, including

diamond jewelry.

designer clothing, Manolo Blahnik shoes, Louis Vuitton luggage, and

an Hermes Birkin bag worth up to $15 ,000 retail.

DiGiacomo wants it all back.

We contacted her. She got her attorney involved. And we had a frank discussion

that these were items that needed to be recovered.

And basically we said we can do this the easy way or the hard way. And she opted

for the easy way and put them in some boxes and shipped them over to us.

DiGiacomo is able to recover almost $1 .3 million.

But once it's all divided up, each victim will see pennies on the dollar.

Next.

Paladino's investors may not get their money back, but will they get justice?

We saw the Mercedes and the BMWs in your families.

We saw your extramarital escapades that we fellows kept quiet, of course.

Is there more money out there?

Are you hiding any money, Mr. Paladino? No, for the moment.

Downtown Boston, January 2014.

In Suffolk County District Court, with many of their victims in the courtroom,

Stephen, Lori, and Gregory Palladino all plead guilty to multiple counts of

fraud.

Stephen Palladino, with the most charges, faces up to 20 years in prison.

Waiting outside as the Palladinos leave the courtroom,

Boston investigative reporter Mike Beaudet tries to get them to talk.

Why are you willing to admit you ripped people out?

I thought it was a very fair process, and as I said from the beginning, my

focus is restitution. That's all I have to say. Is there more money out there?

Are you hiding any money, Mr. Paladino? No further comment, Mr. Barton.

Criminals!

At the sentencing hearing, the Palladino's victims have a chance to say

peace to the man and his accomplices who stole their futures.

We saw the Mercedes and the BMWs and your families. We saw your extramarital

escapades that we fellows kept quiet, of course.

Celtic tickets courtside.

Always flying first class.

Remember the Super Bowl? I took my son. Coach, you took yours first class.

And I paid for it.

The victims in this case weren't necessarily millionaires. They were hard

-working people.

Some of them had substantial sums of money, but Steve Palladino and Viking

Financial, they took almost everything.

And some of these folks are a little older and not enough time to recover,

it's a tragedy what happened.

The judge sentences Stephen Palladino to a 10 -year sentence. His wife Lori gets

two years supervised release.

And his son Gregory receives a two -year sentence.

It was a moment the victims of the Palladino family of West Roxbury have

waiting for. The sentencing of Stephen Palladino, his wife Lori, and son Greg

Suffolk Superior Court.

As Stephen and Greg were led away in handcuffs, some of the people who lost

their life savings could not hold back their anger.

Tell them what his money is. 2024.

You're someone's boyfriend.

Save yourself.

The U .S. Attorney's Office also steps in and charges Palladino with 25 counts

of federal criminal contempt.

It has recently resulted in him serving an additional two years of time. So

after he does 10 to 12 years for the fraud in state prison, he will go to

federal prison for an additional two years for all that activity he was doing

once we had the freeze, once we had...

and said, don't spend any more money.

For the victims, the sentences provide some justice, but little in the way of

payback.

Dr. Ron Nasef, who built an orthopedic surgery practice, raised his children,

and retired, has lost nearly everything.

I've lost a good deal of my retirement. I'm basically living on Social Security

now. Withdrawing my retirement, paying taxes on the early withdrawal, and then

losing it all has been devastating.

Worked 30 years of hard work.

I lost well over seven figures, as did the people who were closest to me, who

invested with me.

People like Dr. Nasef's friend Tom Dowling, who also has to come to terms

the fact that his life savings has vanished.

It was a painful experience to face that cold reality that...

My money is gone.

The money that we had saved by living modestly, and the money that the highest

goal for was to be able to pass it on to my son, that wasn't there.

That hurts.

Worse than losing the money, this case has torn the once -close -native family

apart.

Dr. Nassif blames his older brother, Ernest Buzzy Nassif, for partnering with

Paladino and then convincing many Nassif family members to invest.

I'm disappointed that all he did was take the fifth when he saw his brother,

sister, and other brother, cousin, uncle, and aunt collectively out $6

that we had invested and trusted him.

destroyed our family relationship in many respects forever.

I mean, we're all on opposite sides of civil suits now, and we're not talking,

and his daughters were like my own at one time. I have no communication with

them now.

Despite the fact that Ernest Nassif collected an estimated $2 million over

course of the fraud, he is not charged criminally. Ernest Nassif maintains that

Palladino lied to him also.

providing lists of fake loans that Palladino claimed to have made.

I think he was probably duped too.

Why would Steve give him the fake loans if he was in on all of it?

We only charge what we can prove.

Sometimes it's very difficult when you're trying to unwrap a Ponzi scheme

have an individual who is closer to the center.

It's often tough to look inside people's minds. You can only look at the

circumstantial evidence of what was their knowledge, what was their intent.

Can I prove this beyond a reasonable doubt to a moral certainty at trial that

this person is not a victim, that this person is a criminal?

And that's a tough burden to meet.

But in February 2016 in civil court...

With the burden of proof as less, a judge sides with the family members

Ernest Nassif and issues a summary judgment finding Nassif liable for his

family's losses.

And still, the Nassif family and dozens of others are left shattered by the

flagrant greed of their own friend and neighbor who set the scheme in motion.

It seems everyone involved in the case agrees on one thing.

And Steven Palladino is right where he belongs, no longer able to victimize the

innocent.

You know, it's very disappointing when you see a guy like Steve Palladino who

has an ability to be a contributing member of a community.

Instead, greed gets the better of him. He can't be satisfied with his station

life. He wants more and more and more.

Almost feels like he's entitled to it. He was spending other people's money to

live this lavish lifestyle, but bottom line, he's a guy who couldn't make it on

his own. I don't think anyone's feeling one...

bit of sympathy for Steven Paladino. He got exactly what he deserved.

It's a long sentence. He should be serving a long sentence.