Judge in fraud case scraps plea bargain and orders a trial

Sunday, September 27, 1998

By CHRISTOPHER MUMMA
Staff Writer

A Superior Court judge on Friday threw out a plea agreement involving a North Bergen man who admitted cheating 25 investors of $1.9 million over a five-year period.

The unexpected ruling by Superior Court Judge John A. Conte in Hackensack came the day that R. Steven Stackpole was to be sentenced to prison. In July, Stackpole pleaded guilty to a single count of theft by deception, a crime that carries a term of three to five years.

But the plea bargain was contingent on Stackpole's making some effort to repay money that he and his former business partner, Douglas J. D'Arpino, allegedly swindled from investors from 1989 to 1994. In his ruling, Conte said Stackpole had "zero ability and zero intent" to pay restitution.

"This appears to be a fraud on the court," Conte said as he reinstated the original charges against Stackpole and set a January trial date.

Stackpole has been free on $15,000 bail since the charges were lodged against him more than two years ago. The bail was increased to $250,000 on Friday, and Stackpole was taken to the Bergen County Jail to await trial.

Stackpole has promised to repay investors on a number of occasions since settling a civil lawsuit in Bankruptcy Court in April 1995, said Elaine Saigh, who with her husband lost $65,000 in the swindle.

In that civil agreement, Stackpole promised to repay $750,000 to his former clients. But Stackpole has never paid any restitution, and the longtime Oradell resident now lists a home address in a North Bergen motel. He does not have a job.

"Over the past four years, he hasn't repaid a dime," said Saigh, a New Milford resident whose husband had to put off retiring after losing the $65,000. "I never thought he would repay anything. I guess the judge figured he was stalling around for time."

Authorities said Stackpole -- who formerly ran a River Edge insurance company -- teamed with D'Arpino on a variety of scams offering investments in everything from real estate to the growth prospects of wishing wells placed in shopping malls. D'Arpino is a fugitive.

Victims included groups of firefighters from New Milford and Jersey City, as well as the New Jersey and New York Volunteer Fireman's Association. All told, the firefighters lost more than $400,000.

Prosecutors said D'Arpino persuaded Stackpole in 1989 to funnel him the retirement and investment accounts he was handling at his River Edge insurance office. But instead of pursuing legitimate investments, D'Arpino took the money, an a March 1997 indictment alleges.

Stackpole profited as well, skimming a 20 percent "fee" from each financial transfer into D'Arpino's accounts, prosecutors said.

Of the $1.9 million total, authorities said, about $500,000 went to D'Arpino and $900,000 to Stackpole. The remaining $500,000 was returned to investors as "dividends" on their original investment, prosecutors said.

Stackpole, 59, now faces four second-degree charges of theft by deception, conspiracy, misapplication of entrusted funds, and corporate misconduct. Each count carries a possible prison term of five to 10 years.

Stackpole's attorney, Gerald Krovatin, said Friday that the ruling "puts us back at Square One." Krovatin said it should hardly be considered unusual that Stackpole has not gotten a job since the July plea agreement because he was planning to go to prison.

"We thought the plea was the first step in the right direction toward enabling Steven Stackpole to make these people whole," Krovatin said. "I'm not sure this advances the ball."

Stackpole has said D'Arpino was the mastermind behind the fraudulent schemes, and authorities agree. But Saigh said Stackpole is just as responsible because he had been a fixture in the community for several decades as an insurance broker and had earned the trust of his clients.

"As far as I'm concerned, [Stackpole] is the one I gave my money to," Saigh said.