Fraud Charges Reinstated Against Developer

 

August 21, 2004
By Jon Lender, Courant Staff Writer

A federal appeals court has reinstated a criminal fraud indictment against multimillionaire Hartford developer and philanthropist Anthony D. Autorino.

In a decision circulated Friday, the U.S. 2nd Circuit Court of Appeals in New York overturned a 15-month-old ruling by U.S. District Judge Ellen Bree Burns, who had thrown out the seven-count indictment charging Autorino with wire fraud, bank fraud and making false statements.

Now that the charges are back in effect, the case is on track for a trial in New Haven federal court before Burns - probably in several months and possibly next year.

"We are very pleased that the 2nd Circuit has agreed with the government's position that the indictment returned by the federal grand jury against Mr. Autorino is sufficient on all seven counts. We look forward to being able to proceed with the case before a trial jury as soon as practicable," said Tom Carson, spokesman for the office of the U.S. attorney.

Autorino could not be reached for comment, but his lawyer, Stanley A. Twardy Jr., said Autorino is innocent and "we will continue to fight."

Federal prosecutors alleged in January 2003, when the indictment was originally unsealed, that Autorino a decade earlier had fraudulently obtained duplicate copies of stock certificates he had pledged to the Federal Deposit Insurance Corp. as collateral on two promissory notes, and then sold those shares.

Autorino had signed the promissory notes and handed over the stock certificates to the FDIC in the 1990s to resolve litigation arising from millions of dollars' worth of defaulted bank loans for which he was personally liable.

The stock in question was in a telecommunications company Autorino founded and ran, Shared Technologies.

Scandal-plagued ex-Gov. John G. Rowland's dealings with Autorino's firm came under scrutiny - although no misconduct has been alleged - during investigations by a legislative impeachment panel and a federal criminal probe. Rowland resigned as governor July 1.

Rowland owned thousands of dollars of stock in the firm in the late 1990s, when an Autorino partnership was selected for a deal with the state to jointly redevelop the former G. Fox building in Hartford. The building became the new home of Capital Community College and state offices.

Prosecutors in the Autorino case said that to obtain the duplicate copies of the Shared Technologies stock being held by the FDIC as security, the businessman reported the certificates lost, which caused them to be canceled. When he got the duplicate certificates, he sold the shares - and the FDIC was left holding collateral whose value was now in question.

The FDIC's claims against Autorino were settled eventually, and Twardy argued to Burns after the 2003 indictment that the agency had not been harmed or defrauded by Autorino's actions.

Twardy said Autorino had no fraudulent intent when he obtained the replacement stock certificates, but instead made an innocent mistake in efforts to ensure that the stock could be sold when he sold the company, Shared Technologies, itself.

The original stock certificates held by the FDIC remained valid even after Autorino used the replacement copies to sell the stock, Twardy argued.

Burns agreed, and threw out those charges in May 2003, saying in her ruling: "The FDIC is victimized by Autorino's fraud only if it does not get what it bargained for."

But the office of the U.S. attorney appealed - and the appeals court disagreed with Burns.

In its ruling released late Thursday, but not distributed to the media until Friday, the 2nd Circuit appeals court said the alleged scheme "was likely to frustrate and impair the FDIC's ability to realize the benefit of the security interest pledged to it. We see no reason why these facts, as alleged in the indictment, do not satisfy" criteria in federal law "as a scheme to defraud the FDIC."

"Autorino's scheme to defraud ... involved his concealed simultaneous use of the same shares of stock for two incompatible purposes - one being their retention by the FDIC as security for a loan to him, the second being his sale of the same stock," the appeals court said.

However, Twardy said Friday, "One, Mr. Autorino never intended to defraud the FDIC. It was an innocent mistake. And two, as a matter of law, the FDIC was not in any way harmed."

Up to now, the senior federal prosecutor who has been handling the government's case has been Leonard C. Boyle - but that will now change. Boyle was sworn in Monday as new Gov. M. Jodi Rell's state commissioner of public safety.

Autorino pleaded not guilty in January 2003 to three counts of wire fraud, two counts of making a false statement to the FDIC, and single counts of bank fraud and making a false statement to a financial institution. Each charge is punishable by up to 30 years in prison and a $1 million fine.

Autorino gained prominence in the late 1990s after putting some of the $25 million he made from the sale of Shared Technologies into philanthropic ventures. Those include an arts center at St. Joseph College in West Hartford named for Autorino's late wife, Carol. Also, one of the three venues for music at the Bushnell Center for the Performing Arts in Hartford is the 200-seat Autorino Great Hall.

Some of the problem loans that put Autorino at odds with the FDIC a decade ago were for a housing subdivision in Enfield in which his partners included longtime friend and former Democratic legislative leader William A. DiBella.

DiBella now faces a Securities and Exchange Commission lawsuit over his own dealings with now-convicted ex-state Treasurer Paul Silvester and a Washington, D.C.-based financial firm - which got a lucrative deal with the state pension fund, and paid DiBella a hefty fee.