CONCORD, N.H. (AP) — New Hampshire prosecutors say a Dover man pocketed nearly $300,000 investors gave him to buy and rehabilitate distressed properties.
Nicholas Skaltsis of Dover was charged Thursday with 19 counts of felony theft for operating what prosecutors say was a fraudulent investment scheme.
He was arraigned in Rochester Circuit Court and applied for a public defender. No pleas were entered.
Skaltsis was arrested at the New Hampshire State Hospital, where he is a patient.
Senior Assistant Attorney General James Boffetti — in seeking a high bond — told the judge that Skaltsis poses a danger to himself and attempted suicide sometime after the state Bureau of Securities Regulation started its own investigation last August.
The judge set bail at $300,000, effective upon Skaltsis' release from the hospital.
Boffetti said Skaltsis was arrested at the hospital and returned there by law enforcement officials after his arraignment.
Boffetti said that Skaltsis operates Liberty Realty Trust and Phoenix Asset Group. He said Skaltsis solicited a number of people in the Dover area to invest in distressed properties, promising to return the funds with as much as 14 percent interest.
Prosecutors say Skaltsis bought no properties and failed to repay investors $287,000.
Jeffrey Spill, deputy director of enforcement for the Bureau of Securities Regulation, said Skaltsis's operation amounted to a Ponzi scheme.
"He used new money to pay old debts, comingling investor funds in a personal account and converted investor funds for personal use," Sppill said.
Spill said investors seeking better returns in a down economy often miss the warning signs of a Ponzi scheme, such as a guarantee of higher than average returns.
Spill said the Skaltsis obtained $32,500 from investors in 2010 and at least $327,500 in 2011. The bureau began receiving numerous complaints from investors in 2012, and opened its investigation in August.
The bureau has initiated action to permanently bar Skaltsis from conducting securities-related business in New Hampshire. The bureau also received an order from a Strafford County Superior Court judge freezing the Skaltsis' assets and those of Liberty Realty Trust and the Phoenix Asset Group.
Skaltsis is due back in court Feb. 1 for a probable cause hearing.