A self-employed contractor who waged a multi-year campaign of fraud, harassment, and abuse in the United States Bankruptcy Court has been sentenced to three years in federal prison, announced United States Attorney Zachary A. Cunha.
Ernest P. Ricci, 62, of North Kingstown, previously admitted to a federal judge that he fraudulently applied for and received COVID-related Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL) from the Small Business Administration (SBA), money that he laundered in an effort to conceal it from the bankruptcy court.
Ricci was sentenced today by U.S. District Court Chief Judge John J. McConnell, Jr., to 36 months of incarceration to be followed by three years of federal supervised release. Ricci was also ordered to pay restitution in the amount of $129,306 to the SBA and $77,568 to the IRS, jointly and severally with his wife. He pleaded guilty in November 2023 to charges of bankruptcy fraud, obstruction, suborning perjury, wire fraud, and money laundering.
In October 2017, prior to filing a Chapter 7 Bankruptcy petition, Ricci transferred all of the assets of his business, Premier Home Restoration LLC, to his wife. He then falsely submitted documents to the Bankruptcy Court, under oath, indicating that he had been unemployed for many years, that he had no income, and that he controlled no bank accounts. In fact, it was determined that Ricci continued to control Premier after he transferred the company to his wife; that he ran its day-to-day operations; and that he made use of income from the company to maintain his lifestyle, none of which he disclosed to the Bankruptcy Court.
Ricci failed to truthfully disclose rental income from his Florida property and from another property that he owned in New Hampshire. He was also untruthful when he claimed that he held a $200,000 mortgage in the name of another person for the New Hampshire property when, in fact, he owned the property himself and was collecting rent. He convinced that person to commit perjury before the bankruptcy trustee.
The case was prosecuted by Assistant U.S. Attorney John P. McAdams. The matter was investigated by the FBI, Internal Revenue Service Criminal Investigation, and the United States Bankruptcy Trustee.
Ricci’s schemes to hide assets and mislead the Bankruptcy Court went beyond the bankruptcy proceedings. After the Bankruptcy Trustee was declared the equitable owner of Ricci’s former company, Premier, Ricci fraudulently applied for COVID-related PPP EIDL loans from the SBA. He laundered the proceeds by conducting a series of financial transactions to conceal the location, ownership, and control of the COVID support payments. He used the money to purchase rental property in Warwick, RI, in the name of another person.
Court documents detail a number of stalling tactics, frivolous pleadings, and fraudulent claims by Ernest Ricci during the years-long bankruptcy proceedings. Documents also detail numerous combative communications sent by Ernest Ricci to the bankruptcy Trustee, some laced with profanities.
The investigation and prosecution of Ricci’s crimes are a stark reminder of the importance of honesty and transparency in our financial systems. The sentence handed down by Chief Judge McConnell is a just consequence for Ricci’s brazen and ongoing fraud scheme.
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Key Facts
- State: Rhode Island
- Agency: DOJ USAO
- Category: White Collar Crime|Fraud & Financial Crimes|Federal Crime
- Source: Official Source ↗
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