Judge Stern on Accused Fraudster Loffredo’s Business Dealings, “I Heard Very Disturbing Things”

Judge Stern on Accused Fraudster Loffredo’s Business Dealings, “I Heard Very Disturbing Things”

On Wednesday, Superior Court Judge Brian Sterns considered a handful of motions by accused fraudster Andrew Loffredo, who was seeking to regain control of a handful of his businesses — those businesses are presently under the control of court-appointed temporary receiver Richard Land.

Land presented to the court, citing that Loffredo’s management of the businesses was a failure and violated almost every tenet of business management.

“It is an extreme case of co-mingling. It impacts creditors, including former employees,” said Land. The creditors to date range from developer Stephen Soscia, who may be owed upwards of $30 million, to Billy Zwoden, the former employee of Campanella’s restaurant. whom Loffredo allegedly borrowed Zwoden’s life savings, upwards of $475,000, and then sued him.

GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLAST

This court hearing is just the latest in the saga of Loffredo, who in recent weeks has been arrested by East Greenwich Police, faces multiple legal actions, and faces a growing list of accusations.

 

"I heard Very Disturbing Things"

Land at Wednesday's court hearing outlined that the number of creditors who have filed with the receivership is about 20, including many former employees.

“The buck stops with him. He owns these problems. The demise is where the buck stops — he is responsible,” added Land.

Judge Stern from the bench said, “I heard very disturbing things, assets of certain entities paying the costs of other entities.”

"This multitude of businesses and commingled funds, and that commingling is extremely concerning to the court," said Stern.

Land, as receiver, is now overseeing the management of more than a dozen corporate entities tied to Loffredo.

Loffredo, who spoke to the court during the hearing, sought to peel back control of a number of companies, including Andrew’s Diner in Burrillville and Roses Italian Bakery in Cumberland.

Loffredo has filed seven pleadings with the court totaling nearly 600 pages. Those filings include page after page of text messages exchanged between Loffredo and his former girlfriend, the mother of his children.

Stern did not rule on all of Loffredo’s motions but rejected any effort to return any of the businesses to Loffredo.

Land presented to the court that Caffe Itri, Campanella’s, and Valley Oil — three of Loffredo’s failed businesses have all attracted potential buyers and that he would move forward and seek approval of Judge Stern for their sales.

Loffredo is serving as his own attorney.

In a report to the court, Land wrote, “Finally, the Receiver rejects Loffredo’s effort to distinguish between the Entities for which he seeks to regain control, and the other receivership Entities. Loffredo cannot, and does not, dispute that he commingled funds among the entities, moving money from one entity to another depending upon needs. While Loffredo may pass this off as ordinary operations for related companies, the Receiver views such conduct as improper, particularly where Loffredo’s management of the entities resulted in the demise of several of them – Campanella’s, Café Itri, Valley Oil, among them.”

“Where there are failed entities that admittedly commingled their assets with the Target Entities, and those failed entities have unpaid creditors, the issue of commingling of assets takes on a higher level of importance and strongly mitigates against removing the Entities from the direct oversight and management of the Receiver,” Land added.

 

Sale of the East Greenwich Mansion -- Soscia Seeks to Recover Monies

John Mancini, attorney for Soscia and his business entity, Rett Holdings, which holds the second mortgage on the mansion Loffredo purchased at 5 Lenihan Lane in East Greenwich. Mancini is seeking to recover as much as possible from the millions his client has lost by lending tens of millions of dollars to Loffredo and his now-collapsed businesses.

Mancini seeks to separate the house from the receivership and seeks to maintain and sell the home.

Former State Representative Antonio Giarusso holds the first mortgage on the property. He has moved forward with foreclosing on the property.

Stern said he would consider selling the property, but Land wanted to review whether assets from the businesses had been used by Loffredo to pay for the home.