North Kingstown contractor pleads guilty to bankruptcy fraud, suborning perjury, money laundering, and wire fraud

Date: November 15, 2023

Contact: [email protected]

PROVIDENCE - A North Kingstown man working as a self-employed contractor admitted to a federal judge today that he executed multiple schemes, made false representations, intentionally omitted significant information in filings, suborned perjury, and intentionally obstructed proceedings before the U.S. Bankruptcy Court, all in an attempt to conceal substantial assets during bankruptcy proceedings, announced United States Attorney Zachary A. Cunha.

Ernest P. Ricci also admitted that he fraudulently applied for and received COVID-related Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL) from the Small Business Administration, money that he laundered in an effort to conceal the funds.

Ricci pleaded guilty today to charges of bankruptcy fraud, obstruction, suborning perjury, wire fraud, and money laundering.

Appearing in U.S. District Court, Ricci admitted that in October 2017, prior to filing a Chapter 7 Bankruptcy petition in an attempt to protect a $1.5 million dollar home in Florida that he and his wife used as both rental property and a vacation home, and on which he had failed to make any mortgage payments for approximately five years, he transferred all of the assets of his business, Premier Home Restoration LLC (Premier), to his wife. Ricci admitted that 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, that he garnered no compensation of any kind from his wife's company, that he controlled no bank accounts, and that he had no assets or properties other than the Florida home.

Ricci admitted today that, in fact, he 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, all of which he failed to disclose to the Bankruptcy Court.

Ricci also admitted that he failed to truthfully disclose rental income from his Florida property and from another property that he owned in New Hampshire. Ricci additionally admitted that he was 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 he was collecting rent, and that he convinced that person to commit perjury before the bankruptcy trustee.

According to information presented to the court, in addition to the schemes employed by Ricci to hide assets and mislead the Bankruptcy Court, after the Bankruptcy Trustee was declared to be the equitable owner of Ricci's former company, Premier, Ricci fraudulently applied for COVID-related Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL) from the Small Business Administration, supposedly to pay Premier employees and company expenses. When filing, Ricci failed to disclose that the Trustee was the owner of Premier, and that he and the company were involved in bankruptcy proceedings.

After fraudulently obtaining the EDIL and PPP funds, Ricci engaged in money laundering by conducted a series of financial transactions to conceal the location, ownership, and control of the COVID support payments, and used the funds 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, including claims that he was indigent, during the years' long bankruptcy proceedings. Documents also detail numerous combative communications sent by Ernest Ricci to the bankruptcy Trustee, some laced with profanities.

Ernest Ricci is scheduled to be sentenced on February 22, 2024. The defendant's sentences will be determined by a federal district judge after consideration of the U.S. Sentencing Guidelines and other statutory factors.

The case is being prosecuted by Assistant U.S. Attorney John P. McAdams.

The matter was investigated by the Internal Revenue Service Criminal Investigation (CI), FBI, and the United States Bankruptcy Trustee.

CI is the criminal investigative arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft and more. CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, obtaining a more than a 90 percent federal conviction rate. The agency has 20 field offices located across the U.S. and 12 attaché posts abroad.

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