2 accused of bilking investors of $2M

Friday, March 28, 1997

By THOMAS ZAMBITO
Staff Writer

The owner of a River Edge investment firm and his partner were indicted this week on charges that they defrauded dozens of investors, some of them New Milford volunteer firefighters, out of almost $2 million in savings.

R. Steven Stackpole, 58, of Oradell and Douglas J. D'Arpino, 50, of New York City were named in a four-count indictment released late Tuesday accusing them of theft, conspiracy, misapplication of entrusted property, and misconduct by a corporate official, the state attorney general announced Thursday.

Authorities say the alleged scam mushroomed between 1989 and 1994 as Stackpole encouraged investors to attract others with promises of returns of 12 percent or more.

In the end, many investors lost their life savings after diverting money from retirement accounts or pension plans, said Hackensack attorney David R. Softness, who represented 20 investors during an earlier bankruptcy proceeding involving Stackpole.

"This was what they were going to retire on," Softness said. "There sure are some hard-luck stories here."

Softness said several of his clients were in their 60s and have been forced out of retirement because of their losses. He said about 10 of those who lost money were New Milford firefighters, their spouses, and friends who recommended Stackpole to one another.

He said few of them got a significant return on their money.

The investigation headed by the securities fraud division of the state Division of Criminal Justice began in 1994 after several investors asked for their money back.

Stackpole owned Stackpole Designs Agency Inc. on Kinderkamack Road, described as a financial service, pension, and insurance business. D'Arpino was the director of two financial services companies, Sterling Management Group Inc. and Whitney Carrington Ltd.

Authorities say investors were told their money would fund such things as spiral wishing wells, which collect money on behalf of missing children. Instead, they say, the two men diverted hundreds of thousands of dollars for their own use. The indictment also claims that Stackpole lied by telling clients he was an investment adviser registered in New Jersey.

D'Arpino's company, Sterling Management, would pay Stackpole a 20 percent fee for each person Stackpole got to invest in his venture, authorities said. But, the indictment states, investors were never told about such a fee.

If convicted, both men could face up to 40 years in prison and fines of up to $400,000.