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Colonial Realty Co., owned and operated by the father-son team of Benjamin J. Sisti and Kevin P. Sisti, crashed to the tune of $350 million when it lapsed into bankruptcy in 1990. Hundreds of investors were left holding the bag – and a nearly empty bag at that.
Criminal fraud charges were brought against both Sistis and Jonathan Googel, co-founder of Colonial. Benjamin Sisti took the brunt of the sentencing: federal prison for nine years. Googel got eight years and Kevin Sisti was given a three-year probationary sentence. The light sentence was given because his father told the judge that Kevin assisted in the wrong-doing out of a sense of father-son loyalty – and because Kevin Sisti appeared to be fully cooperating with the government.
Appeared to be…
A bankruptcy settlement was reached in 1994. The Sistis are alleged to have cut deals with the Securities and Exchange Commission, the bankruptcy trustee and the US Attorney’s office. Then a civil case was brought by the bankruptcy trustee, claiming that the Sistis hid assets of considerable value. Investigations are centering around Benjamin Sisti, Helen (his wife) Sisti, Kevin Sisti, family friend Patrick Tufano and other friends and employees.
An FBI search of the senior Sisti’s home produced evidence that Tufano, who is the father-in-law of the Sistis’ daughter, was holding $300,000 of undeclared Sisti money. Questions were also raised about the true ownership of a steakhouse in Wethersfield, supposedly held by Spectators LLC, and about Kevin Sisti’s $300,000 family residence.
When Kevin Sisti was recently arrested again – this time by FBI and IRS agents – he was charged with one count of making a false statement to a federal agency. Such a charge could result in a five-year sentence and a $1 million fine. It could also result in a violation of his 1995 probation sentence on the money laundering charge, with the probation reverting to three years of prison time.
Investors may actually recover little more than satisfaction in the new developments; but for some, that may be payment enough.
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