Massive Real Estate Scheme Results In Indictment

Attorney General Spitzer today announced a 39-count criminal indictment against a prominent Hudson Valley businessman who has been linked to a series of failed real estate transactions across the state and nation.

The indictment charges Francis A. Zarro Jr., 51, with fraudulently obtaining at least $25 million from at least 28 unsuspecting investors.

The indictment alleges that Zarro used fraudulent means to convince dozens of people to invest in or provide services to major projects, including the purchase and renovation of country clubs in the Hudson Valley, the Capital Region and Vermont, as well as Las Vegas casinos and Upstate New York hotels.

Zarro, individually or through his businesses, American Past Time Holdings and New Deal Projects, targeted successful business persons and other affluent individuals with carefully-prepared business propositions. He would lure these investors to make significant up-front payments - sometimes in the millions of dollars - and then use that money to support an extravagant lifestyle. For example, Zarro rented expensive office space in Manhattan, used limousines for transportation, and hired high-priced law firms to create the appearance that he had the capacity to purchase multi-millionaire dollar properties.

The indictment charges Zarro with the following:

• Four counts of Grand Larceny in the 1st Degree, a class B felony;
  
  
• 11 counts of Grand Larceny in the 2nd Degree, a class C felony;
  
  
• 12 counts of Grand Larceny in the 3rd Degree, a class D felony;
  
  
• One count of Grand Larceny in the 4th Degree, a class E felony;
  
  
• One count of Scheme to Defraud in the 1st Degree, a class E felony;
  
  
• Three counts of Criminal Possession of Stolen Property 1st Degree, a class B felony;
  
  
• Six counts of Criminal Possession of Stolen Property 2nd Degree, a class C felony; and
  
  
• One count of Criminal Possession of Stolen Property in the 3rd Degree, a class D felony.

If convicted on all counts, Zarro faces incarceration of up to ten to 30 years.

Zarro was arraigned today before the Hon. James T. Rooney, acting judge of the Dutchess County Court, and pleaded not guilty to all counts. The charges are merely accusations and the defendant is presumed innocent unless and until proven guilty.

Zarro, a disbarred attorney, was a longtime resident of the Hudson Valley. He now lives in Dorset, Vermont.

Spitzer thanked Dutchess County District Attorney William V. Grady and the New York State Police for their assistance in this case.

This case is being handled by Assistant Attorney General Scott Andersen of the Securities Prosecutions Unit and Investigator Richard Friedman.