Fifty-four-year-old Gregory Loles (LOW-liz) of Easton pleaded guilty in 2011 to single counts of mail fraud, wire fraud, securities fraud and money laundering. He was sentenced Wednesday.
Prosecutors said Loles stole from more than 50 victims over nearly a decade. He allegedly took about $14 million from a family in Greece and about $2 million from St. Barbara church in Orange, whose investments he managed. Prosecutors said Loles' broker registration had been cancelled but he convinced the victims he was an investment manager and misrepresented his successes.
Authorities say he used the money to support his auto racing businesses and for personal bills.
Victims of Gregory P. Loles, the Easton man who pleaded guilty in July 2011 to embezzling more than $10 million, including $2.1 million from St. Barbara’s Greek Orthodox Church in Orange, will have to wait a few more days to see him sentenced.
The trade-off, however, is that Loles could receive the maximum 30-year penalty his charges carry.
The Rev. Peter Orfanakos, the pastor at St. Barbara’s, arrived at U.S. District court along with several of Loles’ other victims on Monday morning thinking the sentencing would finally occur later that day, this after Loles had seen his sentencing postponed five times.
But a day of brisk and at times intense cross-examination, where Loles was grilled about his role in a $14 million scheme in Greece in which he allegedly stole money from a prominent Greek family, means he won’t be sentenced until Wednesday.
“It’s sad,” Orfanakos said about Monday’s ordeal, and the pain Loles has inflicted upon his victims, many of whom are parishioners.
Loles, 55, was originally slated to be sentenced in October 2011 but his attorney, Jeremiah Donovan, has said the date has been held up as investigators attempt to determine exactly how many victims were defrauded.
Paperwork filed by the government on Sunday places the tally somewhere north of 250.
“Most recently he had the temerity to testify under oath that $14 million of funds that he took from a Greek family, after the father of that family had unexpectedly died, was in fact his money,” states the memorandum.
Loles’ alleged swindling of the Greek family, especially the estate of the late John Missailidis, was at the heart of Monday’s testimony.
Donovan argued that accusations Loles stole the family’s money should be dismissed as hearsay, since none of the family members traveled from Greece to Hartford to testify.
U.S. District Court Judge Alvin Thompson, however, determined otherwise.
Thompson listened as Loles took the witness stand and described how he ingratiated himself within the Missailidis family and ultimately won the trust of the family’s patriarch. Loles spoke of how the elder Missailidis formed several small holding companies, all aimed at supporting a lucrative medical device business.
The company at the heart of his testimony, the London-based medical device company Smith & Nephew Inc., sold medical devices to Greek state-run hospitals, Loles explained.
“A middle company was introduced,” he said. “Another Greek company (owned by Missailidis) inflated invoices because by law there can only be a 25 percent profit when selling to Greek hospitals.”
The middle company collected the profits, Loles said. A 5 percent fee went to Milbury Holdings, another company run by Missailidis. Loles testified that the family kicked cash back to Greek government officials to keep the scheme afloat.
After Missailidis died, a $14 million sum was transferred into Loles’ Apeiron Capital, the institution he ran out of his Easton mansion.
“I put myself in this position,” Loles told the court. “If I had the money I’d 100 percent give it to the victims.”
The $14 million, whoever it truly belonged to, is all gone, allegedly spent by Loles to fund a lavish lifestyle that included owning a Porsche race car company.
Assistant U.S. Attorney Michael McGarry used his chance at cross-examination to try to shred any claim from Loles that the $14 million belonged to him.
McGarry also painted a portrait for Thompson, through his line of questioning, of how profits from sales of medical devices to Greek hospitals were laundered by investing the money into initial public stock offerings.
“It was a lot of money, especially in pre-Olympic years,” Loles testified, referring to the financial boom that lit up much of Greece in the years leading up to the 2004 Summer Olympics in Athens.
He testified that the true profit made in the scheme by the Missailidis family ranged from $30 to $35 million.
Loles bristled whenever McGarry used the term “laundered” to describe how the business made cash, but McGarry pointed out that from the beginning the money was made by committing a fraud upon Greek hospitals.
McGarry then went down the line of victims named in the federal report.
“I created this horrible mess,” Loles said.
“And that list goes on and on, not counting the gymnasium (at St. Barbara’s) that these schoolkids tried to raise money for,” McGarry noted.
Loles said that it was “obvious in retrospect I couldn’t make everyone whole” but McGarry again pointed to the $14 million.
“You never let them (his victims) benefit from the sale of those Greek IPOs,” McGarry countered. “They could have benefited from an actual investment and not a Ponzi scheme.
“And you never brought this $14 million from abroad until he (Missailidis) died.”
Loles is due to back in court Wednesday at 9 a.m. He has been incarcerated since Dec. 15, 2009.
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