Mashpee Business, Residents Accused Of Ponzi Scheme
By: Brian Kehrl
Like money in the bank is how Thomas A. Belekewicz and Merope E. Dayos allegedly described the investments they obtained from mortgage clients and others into a Mashpee business.
But even as Mr. Belekewicz and Ms. Dayos were reassuring their clients over the past few years, according to a civil complaint filed by state financial regulators last week, their finances were falling apart.
A scheme that the two allegedly devised broke down when they ran out of money and could not make either guaranteed interest payments or return principal investments, according to civil charges announced last week. A company the two founded is now in bankruptcy. A host of lawsuits have been filed in Barnstable Superior Court.
Mr. Belekewicz, who lives in Sandwich and owns property in Mashpee; Ms. Dayos, a Mashpee resident; and Investment Realty Funding Inc., the company the two founded based on Route 151 in Mashpee, were the subjects of a complaint filed last Wednesday by the Securities Division within the Secretary of the Commonwealth’s office.
The complaint, which will be considered by a state-appointed hearing officer, accuses Mr. Belekewicz and Ms. Dayos of illegally acting as mortgage and investment brokers and of using investments they obtained for personal gain. It requests a cease-and-desist order, seeks permission to “disgorge all profits and other direct or indirect remuneration received from the alleged wrongdoing,” and proposes an undetermined fine.
“Belekewicz described [Investment Realty Funding] to investors as being better than investing in a stock and better than money held in a bank account because the fund paid a higher rate of return. Belekewicz further informed investors that any requested redemptions from IRF could be satisfied within a two week period,” according to the complaint. “Despite Belekewicz’s representations as to the liquidity of IRF, to date, all requests for the return of funds from IRF remain unsatisfied.”
No criminal charges have been filed against Mr. Belekewicz, who was the president, vice president, and treasurer of IRF, according to state corporate filings, or Ms. Dayos, who was secretary of the corporation.
The defendants have 21 days in which to respond to the civil complaint. According to a representative of the secretary of the commonwealth’s office, no response had been filed as of this week.
Telephone messages left for both defendants and their attorneys listed on the complaint were not returned.
The complaint, which cites an investigation of bank records, interviews with former employees, and an affidavit submitted by an alleged victim, accuses the two of creating a Ponzi scheme in which they solicited investments to IRF beginning around 2002, primarily through their positions at Sherwood Mortgage Group in Mashpee.
They promised investors high rates of return, but began experiencing financial difficulties around 2006, according to the complaint. The complaint alleges that Mr. Belekewicz paid himself or cashed $1.1 million from IRF between March 2006 and August 2008.
“Further, many properties purchased with IRF funds were held in Belekewicz and Dayos’s name,” according to the complaint. “A former IRF administrative assistant and secretary to Belekewicz and Dayos also testified that IRF funds were used to pay credit card bills that contained personal expenses of Dayos.”
“Subsequent to its review of Belekewicz’s personal bank accounts, the [state] Enforcement Section determined that in the two-year period between approximately June 8, 2006, and May 16, 2008, Belekewicz transferred at least $289,000 to an entity identified on checks as M.P.G.E. The M.P.G.E. identified on the transfers from Belekewicz is the Mashantucket Pequot Gaming Enterprise d/b/a Foxwoods Resort Casino,” according to the complaint.
The complaint also details the story of two alleged victims of the scheme, Dominic and Christina Aquilano, Sagamore residents who became involved with IRF when they sought to refinance their home with Mr. Belekewicz.
Mr. Belekewicz urged them to use the equity in their home to invest in IRF, which he described as a high-end investment opportunity that would pay out 12 percent annual interest on whatever they put in, according to the complaint and a telephone interview this week with Mr. Aquilano. He claimed he was able to guarantee such a high rate of return because he lent money to construction companies for upward of 20 percent, a profit he could then return to his investors.
The couple agreed in 2006 to an initial investment of $100,000 in IRF, an amount that Mr. Belekewicz allegedly said was the minimum acceptable amount, according to the complaint.
“He gave us the feeling that he was very well-to-do, that he was doing us a favor by letting us into this fund,” Mr. Aquilano said this week. “At that time I had no idea that he was spending a lot of the fund money on his own personal greed.”
Over the next few years, the promised interest payments were decreased from 12 to 11 to 9 percent, according to the complaint. The Aquilanos requested to have their investment returned. Mr. Belekewicz made several offers to repay them, including moving ownership of the property and using his personal funds. The payments stopped.
“We were innocent people that trusted him, us and other families. And now we are in a very difficult situation,” Mr. Aquilano said.
Mr. Aquilano said there are several possibilities under which they could be repaid, and he remains hopeful, but the future of his investment is unclear.
Mr. Belekewicz is accused of several other improprieties in civil suits filed in Barnstable Superior Court, including one filed by the Aquilanos, on allegations ranging from not paying gambling debts at Foxwoods casino to not paying a contract for nearly $800,000 worth of work at his property on Pickerel Cove Road.
Brian McNiff, a spokesman for the Secretary of the Commonwealth William F. Galvin, said financial schemes are fairly common.
“One reason we are seeing Ponzi schemes, and not only we but other states and the federal government, is that when Ponzi schemes start off and exist, they pay off old investors with money from new investors. That is fine if the market is going up. But when the market tanks, as it did last year and late the year before, then you are high and dry,” he said. “That is ultimately what happened to Madoff. That is when these kinds of things come to light. So we are definitely seeing a few more of them now. But they are always around.”
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