Property manager, accountant indicted for rental fraud scheme
United States Attorney for the District of Connecticut announced Thursday that a federal grand jury in Bridgeport has returned an indictment charging a Monroe property management company, its owner and the company’s accountant, a Trumbull man, with conspiring to defraud a Bridgeport-based residential property owner.
As alleged in the indictment, which was returned Wednesday and unsealed Thursday, Anthony Testo, 66, of Monroe, was the owner and president of ACT Builders, Inc., which was contracted to serve as a property manager for an entity in Bridgeport that owned an apartment complex and several single and multi-family residences. Testo’s role as property manager included filling vacant rental units, setting rental amounts, collecting security deposits, collecting rent from tenants and depositing rental payments in the property owner’s bank account. Testo was also required to submit to the property owner a monthly “rent roll,” which was a spreadsheet showing the occupancy of the rental units, the rental amounts due and the rental payments collected from tenants.
Thomas Ragonese, 54, of Trumbull, provided accounting services to Testo and ACT Builders. At Testo’s instruction, Ragonese prepared the rent rolls.
From approximately January 2007 to August 2010, it is alleged that Testo, ACT Builders and Ragonese schemed to defraud the property owner by submitting fraudulent rent rolls that misrepresented that certain rental units were vacant with no rent due when, in fact, the apartments were occupied and rent had been collected. The rent rolls also misrepresented that the rent due and collected for certain rental units was lower than the amount that was actually collected. It is alleged that Testo deposited rental income that was due to the property owner into both his personal bank account and the ACT Builders bank account.
The indictment also alleges that Ragonese maintained a second set of records in which he kept track of the rental income actually due and collected, which was more than the rental income reported on the rent rolls.
The indictment charges Testo, Ragonese and ACT Builders with one count of conspiracy to commit wire fraud. If convicted of the charge, Testo and Ragonese face a maximum term of imprisonment of 20 years, and ACT Builders faces a maximum term of probation of five years.
Testo was arrested Thursday morning. He appeared before U.S. Magistrate Judge William I. Garfinkel and was released into home confinement, under electronic monitoring, on a $500,000 bond.
Ragonese was arrested on a criminal complaint on Feb. 25, 2014. He also appeared Thursday before Judge Garfinkel and was released on a $250,000 bond.
This case is assigned to U.S. District Judge Robert N. Chatigny in Hartford.
This matter is being investigated by the FBI and the IRS – Criminal Investigation Division. The case is being prosecuted by Assistant U.S. Attorney Felice Duffy.
An indictment is not evidence of guilt. Charges are only allegations, and each defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.