Robert John Van Zandt of the ubiquitous Blondell Avenue-based Van Zandt Agency was found dead from a gun shot wound to the head in a Yonkers home on Tuesday, September 6.
The 44-year-old Van Zandt had been under investigation by the state Attorney General’s office since April, along with his father Robert Henry Van Zandt, wife Kimmarie Gervasi Van Zandt and several other entities, for running an alleged ponzi scheme through the agency.
The Westchester County medical examiner called the death a suicide, while Yonkers police said that cause of death is “possible suicide” but have not ruled out other causes.
The A.G.’s office believes the Van Zandts defrauded over 100 investors out of about $20 million by promising returns of 7 to 12 percent per year on phony securities investments without disclosing that the invested money was actually tied up in real estate developments that were subject to market fluctuations.
To further compound the matter, the A.G. alleges that the Van Zandts were not even licensed to sell the securities they led customers to believe they were investing in. Most investors were customers of the Van Zandts’ successful, decades-old tax prep business.
The A.G.’s request for a preliminary injunction, filed in State Supreme Court on Wednesday, April 6, alleged that when the real estate market collapsed around 2008 and left the Van Zandts unable to pay investors the returns they had promised, a ponzi scheme was hatched in which they “raised money from new investors to pay old investors.”
The A.G. also alleged the Van Zandts “misappropriated investors funds to pay personal expenses and gambling debts,” such as trips to Las Vegas.
Robert John Van Zandt had served time in federal prison for a “similar scheme,” according to the filing, as the one he was being investigated for this year.He was released in 2001.
Law firm Malecki Law, which specializes in securities fraud cases, is currently soliciting individuals who believe they were defrauded by the Van Zandts to be part of a civil suit it plans to file.
“The most challenging question is where did this money go?” said firm owner Jenice Malecki.
The law office started receiving calls in mid-August, and has heard from about seven people so far who said they were allegedly bilked by the Van Zandts.
“We’re seeing a lot of people who worked and lived in the community and gave them a lot of money,” she said.
Malecki said that in her experience, ponzi schemes tend to be exposed when markets collapse and people try to withdraw their money while the pool of new investors dries up.
She also said that when someone has a reputation and history in a community, like the Van Zandts in the northeast Bronx and Westchester, it makes perpetrating a ponzi scheme that much easier.
“People have this willful disbelief,” she said. “And they prey on trust.”
Stan Pilny lived for decades on Herring Avenue and put in 40 years as a stock clerk at the Stella D’oro cookie factory in Kingsbridge before retiring to North Carolina in 2005.
He frequently used the Van Zandts for tax prep purposes and said he decided to invest his 401k, worth about $98,000 with the Van Zandts in 2004.
“They had fliers on the desk saying to invest in these things and you would get nine percent,” Pilny, 69, said.
He got monthly “interest” checks, and account statements. But he said that, in April the checks stopped coming.
His daughter, who works in a legal office, did some investigating and was able to obtain a copy of the D.A.’s April filing.
Pilny believes about half of his 401k has been lost.
“There’s nothing I can do,” he said. “They (A.G.’s office) told me to hire an attorney. I have no money.”
Calls to the Van Zandt Agency were not returned.
Pilny trusted the Van Zandts so much he recommended them to Stella D’oro co-worker Eddie Marrero.
The 52-year-old said he gave the Van Zandts $37,000 in 2008 with the belief he was setting up an IRA account.
Marrero claims he was told he would not see any interest for two years, while the account was “under construction.”
Over two years and several hundred dollars in fees later, Marrero said he never earned a cent.
“They were doing my taxes for the last ten years,” he said. “I never had any problems with that.”
Like Pilny, he was resigned to losing his investment.
“The way I look at it, there’s nothing I can do,” he said.
The A.G.’s investigation continues.
©2011 Community News Group