(ran PS edition of PASCO TIMES)
The retiree lost $63,000 in the scam, which claimed 400 victims nationwide.
For the first few months, Vincent Sacco and his wife couldn't sleep at night. Even now, almost two years later, it shakes him up to talk about it.
"This was my bread and butter," Sacco said of the $75,000 he invested in Medco Inc. "I put my whole IRA into that investment. I told them, "I can't afford to lose this money.' "
But lose it he did. Federal and state authorities now say Medco was nothing more than an elaborate, $16-million Ponzi scheme.
Sacco is one of about a dozen Spring Hill residents, and of about 400 nationwide, who were defrauded of their investments. Like many of the other Spring Hill victims, Sacco invested after attending a seminar at what used to be Sorrento's Italian Restaurant in Spring Hill.
Sacco, 71, who ran an alterations business in Pennsylvania for 22 years, now lives off a monthly Social Security check of $442. He traded in his 1995 van for a high-mileage 1983 Ford Crown Victoria. And his home is for sale because he no longer can afford it.
Word that Medco Inc. president Mark R. Blacher was sentenced two weeks ago to four years and three months in federal prison comes as little solace to Sacco. And Sacco scoffs at the $10.7-million Blacher was ordered to pay in restitution. He doesn't expect to see one dime.
"To me, that's a slap on the wrist," Sacco said. "I don't think he's going to be paying anybody back. That a man could do something like this, I don't know how he can sleep at night."
Robert Crespo, a financial investigator in criminal enforcement for the comptroller's office, acknowledged the chances of victims getting their money back is slim.
"It's a bittersweet type of ending," Crespo said.
The courts named a federal receivership, which was able to garner $1.5-million by selling the firm's assets and freezing bank accounts, Crespo said. For Sacco, that translated to a return of 20 percent of his investment. He still lost $63,000.
Crespo said the case was particularly disturbing because so many of the victims were elderly people who had invested their life savings.
But Crespo said it is important that victims, including those in Spring Hill, learn their testimony helped convict Blacher.
"We want people to see that ultimately, although it took some time, justice was done," Crespo said. "We did get him.
"These are the types of cases, you work them and it takes a long time," said Crespo, noting the investigation began in November 1997. "You want them to be done as soon as you can, but they take time."
The state office of the comptroller enlisted the federal Securities and Exchange Commission to help investigate. Blacher pleaded guilty May 28 to mail and wire fraud and was sentenced nearly three weeks ago.
"This is probably as big a Ponzi scheme as you're going to get," Crespo said.
Blacher told investors their money would be used to buy medical equipment, which would serve as collateral for their investment. They also were led to believe the investment would have a high rate of return when doctors bought the medical equipment, Crespo said. "None of the medical equipment existed," Crespo said.
Medco was basically a Ponzi scheme, prosecutors said, where existing investors were paid from the funds of new investors rather than returns on investments.
"He lured these people into investing money into what they thought would be a safe investment opportunity," Crespo said.
Sacco's common-law wife, Josephine McDonnell, a retired waitress who lost about $15,000 in the scheme, took the loss hard, Sacco said. She was diagnosed with cancer six months after they lost their money, and she died March 31 at age 69.
"You never think something like this could happen to you," Sacco said.