Couple Charged In Ponzi Scheme
An Ontario couple, using a defunct Ogdensburg business mailing address, allegedly conducted what police called a Ponzi scheme with their on-line travel agency, costing one customer nearly $5,000 and possibly many others nationwide thousands more in an apparent holiday sea cruise scam.
Their alleged victims, police say, are from as far away as California and as close by as Watertown as well as several prominent charities.
Robert R. Belanger, 65, and his wife, Linda M., 64, both of Kingston, were arrested Tuesday by Ogdensburg police and each charged with fourth-degree grand larceny after surrendering at the U.S. port of entry at the Ogdensburg-Prescott International Bridge. They pleaded not guilty in city court. Noting that they turned themselves in, Judge George E. Silver released them on their own recognizance and adjourned their case to April 6.
More charges are pending.
According to court documents, the Belangers in January 2009 sold a Cunard Cruise Lines holiday cruise to a New York City man at a NYNEX charity auction. He paid the couple's Cruise Ship Holidays, 812 Proctor Ave., $2,100 plus another $2,819 for an upgrade to include his children.
Cruise Ship Holidays, which isn't licensed in New York, was in business at 812 Proctor Ave. as an incubator business at the Corporate Center in Commerce Park, for three years until last November when it closed, according to Marlene Chapple, the Corporate Center's owner.
But the Belangers never paid for the cruise, which was set to sail last July 1. Instead, according to court documents, the customer "was forced to pay a second time for an inferior cruise, this time directly to Cunard Cruise Lines."
Ogdensburg Police Detective Sgt. Harry J. McCarthy said the Belangers used money from other cruise customers to block book unreserved cabins on later cruises. The couple told police they hoped to find bidders from other charity auctions and use their money to cover the earlier cruise.
Sometimes it worked. More often, according to Mr. McCarthy, it didn't.
"It was a Ponzi scheme," he said Tuesday. "They were robbing Peter to pay Paul. They were using your money to pay for someone else's cruise. They used the money for other things."
The Belangers' suspected victims are from New York, New Jersey, Kansas, California, Texas, Washington, Michigan, Pennsylvania, Florida and Canada.
Mr. McCarthy said some of the New York victims are from the Watertown area.
City police were assisted in their investigation by the state Attorney General's Office and the FBI.
Mr. McCarthy said police were first notified in January 2009 by members of the Ontario Real Estate Association. They complained of paying for the same cruise several times. They had booked a so-called "Seminar at Sea" program with the Ontario couple.
The allegedly defrauded charities included the Alzheimer's Disease Association, Dallas Symphony Orchestra, Society for the Prevention of Cruelty to Animals and the National Eating Disorders Association.
"CSH's (Cruise Ship Holidays') victims are out thousands of dollars and some charities are in litigation," he said. "Many families had taken vacation time off and paid for non-refundable airline tickets only to find that they had no cruise waiting for them."
The Belangers are represented by attorney Alexander Lesyk.
