Collections Ponzi Scheme Leads To Guilty Plea

A Buffalo, N.Y. man who told investors he was a debt collector pleaded guilty Wednesday to bilking Citizens Bank of Buffalo, N.Y. and 17 investors in a fraud that cost the victims an estimated $440,000.

Noah Schapiro was charged with grand larceny. He likely will face a prison term of six to 12 years when he is sentenced on March 22, and will be forced to sign confessions of judgment, state Supreme Court Justice Christopher J. Burns told him.

Schapiro, a former stock broker, took the money from his victims between March 2008 and September 2009. The victims had been promised big profits in debt collection funds, according to Prosecutor Candace K. Vogel and State Police Investigator Therese Schroeder.

Vogel told the judge the collection scam amounted to "one big Ponzi scheme." She said Schapiro defrauded the bank by pulling off a check kiting scheme between May 20, 2008 and June 11, 2008, writing checks to other businesses on a Citizens Bank account he knew lacked the funds to cover the checks.

Schapiro, 38, either spent the investment funds on himself or to pay off earlier debts from investors he had coaxed into his scheme. He previously was convicted of fraud in 1998.