U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23318 / August 13, 2015
Securities and Exchange Commission v. Palladino, et al., Civil Action No. 13-11024-DPW (United States District Court for the District of Massachusetts)
United States v. Steven Palladino, Criminal Action No. 14-10100-DPW (United States District Court for the District of Massachusetts)
Massachusetts Resident Sentenced to Two Years for Criminal Contempt Based On Violating Court Orders Obtained by the SEC
The Securities and Exchange Commission announced today that, on August 11, 2015, Steven Palladino, who was convicted and sentenced in state court for operating a Ponzi scheme, was sentenced to serve two additional years in federal prison for criminal contempt arising from his repeated violations of court orders obtained by the Commission in its civil action filed in 2013 against Palladino and his Massachusetts-based company, Viking Financial Group, Inc.
In explaining the reasons for the two-year federal sentence, United States District Judge Douglas P. Woodlock stated:
It is to say to other people who are brought in to court by the SEC, “This is what could happen to you if you violate the interim orders that judges frequently impose in cases brought by the SEC or similar agencies. It is not going to be folded up into a ball of wax and everything is going to be treated as congealed. It is a separate and distinct crime, and you will pay for it, and you will pay for it by additional time in prison.”
On April 30, 2013, the Commission filed an emergency action against Palladino and Viking and obtained from the court certain preliminary relief, including an order freezing Palladino’s and Viking’s assets. Between September 2013 and March 2014, the Commission filed four motions for civil contempt against Palladino based on his violating the asset freeze while it was in effect. Thereafter, in April 2014, the U.S. Attorney filed an information charging Palladino with 25 counts of criminal contempt arising from the same violations that formed the basis for the Commission’s motions. On May 14, 2015, Palladino pled guilty to all 25 charges in the information. Palladino will serve his federal sentence after completion of the 10-12 year prison sentence that he received in state court for the same conduct alleged by the Commission in its case.
The Commission acknowledges the assistance of Suffolk County (Massachusetts) District Attorney Daniel F. Conley’s Office, whose office referred Palladino’s and Viking’s conduct to the Commission, and District of Massachusetts United States Attorney Carmen M. Ortiz’ Office, whose office prosecuted the federal criminal case against Palladino.