Cerilli to get 5 years
Dennis Cerilli was the "leader" and "organizer" of a group of shady salesmen who swindled elderly and sick investors out of nearly $5 million in a stock scam that began in Greensburg in 1995.
For those actions, the former Hempfield Township resident will serve five years in a federal prison when he is sentenced Thursday in U.S. District Court in Pittsburgh for mail fraud.
With the money he and his salesmen stole, Cerilli and his cohorts lived a lavish lifestyle, leasing expensive cars and using their victims' savings to buy clothes, take vacations and purchase personal items before the FBI and U.S. Securities and Exchange Commission raided his company and put Cerilli out of business.
Since then, Cerilli has remained free on bail. U.S. District Court Judge Alan Bloch also will sentence the 55-year-old con man to three years of probation and could fine him up to $250,000.
In the meantime, Cerilli faces state charges that he bilked another 21 investors out of more than $800,000 in alleged scams stemming from failed business ventures in Westmoreland and Armstrong counties. That case is pending.
According to sentencing guidelines outlined by Bloch, Cerilli's crime rated 84 to 105 months in prison, but he will receive 60 months because that's the maximum sentence under the law for one count of mail fraud.
Cerilli agreed to plead guilty to the charges and "has accepted responsibility for his criminal conduct," Bloch wrote.
Cerilli now lives in Myrtle Beach, S.C. He pleaded guilty to the charge in June 2001 and had agreed to repay $700,000 to his victims to settle civil charges filed by the U.S. Securities and Exchange Commission.
Cerilli and his business partner, Frank DeBone, of Greensburg, had formed an advertising company that printed ads on the back of supermarket receipts. To expand their growing company, they decided to sell bonds to raise capital.
Together they formed Appalachian Investment Group in the mid-1990s but never registered the company with the SEC. Company salesmen sold risky, unregistered securities to victims by promising them high rates of interest but failed to inform their clients of the risks.
DeBone is serving 37 months in a federal prison camp in Cumberland, Md., for his role in the scheme.
Cerilli stole more than $4.6 million and, with the money, paid himself $1.2 million in salary, bought $65,000 worth of clothes, jewelry, golf equipment, and took trips to Las Vegas and Florida. With the money, Cerilli also purchased a $250,000 home that was later seized by the federal government.
While free on bond on the federal charges, Cerilli moved to Florida and later to Georgia and South Carolina where he tried to develop amphitheaters using the same sales pitch that he used in Pennsylvania.
His salesmen have either been found guilty or pleaded guilty to mail fraud charges.
The Rev. John Wayne Hinton, 53, the pastor of a Somerset County church, was sentenced to one day in jail, two years' probation and ordered to perform 100 hours of community service and give up $23,000 in personal investments seized by the federal government.
Joseph Beckner, 47, of Hempfield Township, also pleaded guilty to one count of mail fraud and was given one day in prison, two years of probation, 100 hours of community service and one month of home detention.
Robert Walters, 55, of Jeannette; Edmond Genest, 66 of Lower Burrell; and Dennis Oslosky, 41, of Delmont, were convicted in May and are awaiting sentencing. Salesman Daniel Ranieri pleaded guilty in May and has not been sentenced.
Cerilli's legal problems won't end when he's sentenced in federal court.
He faces trial in Westmoreland County on 64 counts of theft, deceptive business practices and writing bad checks in connection with failed business deals at the Westmoreland Fairgrounds in Mt. Pleasant Township and in Sugarcreek Township in Armstrong County.
Cerilli, who operated food festivals at the Westmoreland Fairgrounds, is accused of bilking investors who wanted to purchase rights to future events at the facility. That deal fell through when the board of trustees of the fairgrounds association voted to abandon plans to build an outdoor concert venue at the fairgrounds.
Cerilli then tried to develop an amphitheater in Armstrong County, but that deal also failed to materialize. His attorney, Bruce Antkowiak, last week filed a lengthy pretrial motion that will be heard next month, claiming his client's actions should be settled in civil — not criminal — court.
In his motion, Antkowiak does not dispute that Cerilli took money from investors but argued the prosecution's case "is devoid of any evidence" that Cerilli used any of the investors' money for personal gain.
"Through a variety of circumstances, Cerilli could not fulfill these amphitheater projects," Antkowiak argued. "The facts are clear that the persons who invested in these speculative ventures have not been refunded the money they invested and have not realized the gains they had hoped."
He added the deals were made in "good faith belief" that the projects were legitimate and "had they been completed, would have returned all these funds to the investors with the appropriate interest."
District Attorney John Peck disputes Antkowiak's assertions.
"We have evidence that shows it was a substantial and involved scheme to defraud investors," Peck said.
