Court orders 3 Long Islanders to return $30 million from investment fraud
Eric Aronson, of Syosset, is one of three Long Islanders ordered to disgorge more than $30 million, including interest, they collected in an investment fraud, the Securities and Exchange Commission said. This photo is from Dec. 12, 2003. Credit: Newsday / Daniel Goodrich
A federal court in Manhattan has ordered three Long Islanders to return more than $30 million, including interest, collected in an investment fraud centered around a Syosset company, according to the Securities and Exchange Commission.
Eric Aronson of Syosset, Fredric Aaron of Plainview and Vincent Buonauro of West Islip also were ordered Tuesday by U.S. District Judge Jed Rakoff to pay civil penalties.
The SEC, which announced the court order Wednesday, filed a complaint in 2011 alleging that Syosset-based PermaPave Industries and its affiliates raised more than $26 million from more than 140 investors from 2006 through 2010 in what amounted to a Ponzi scheme.
Aronson, who is ordered to pay back $18.3 million, was chief executive of PermaPave, a maker of permeable paving stones. Buonauro, ordered to pay back $12.6 million, was the company's president.
Aaron, the lawyer for PermaPave, was ordered to pay back $1.8 million.
Authorities are seeking to collect the disgorged money and return it to defrauded investors.
Separate civil penalties for the three men amounted to $1.6 million.
The order comes about a year after Aronson pleaded guilty to criminal charges of securities fraud for which he faced between 121 and 151 months in prison.
In 2013, the court issued consent judgments agreed to by Buonauro and Aaron, barring them from future violations of various securities laws.
PermaPave marketed in the United States paving stones manufactured in Australia. The company's investors were promised returns of as much as 400 percent for buying promissory notes, the U.S. attorney's office said a year ago, when Aronson pleaded guilty.
Much of the money taken in the fraud went for personal expenses, including vacations, watches, jewelry and automobiles, officials said.
Ken Schachter covers corporate news, including technology and aerospace, and other business topics for Newsday. He has also worked at The Miami Herald and The Jerusalem Post.
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