(Bloomberg)-Before the lawsuits started pilling up in court, before his employer accused Him of running a “Massive ponzi-like fraud,” and before the fabi showed up, Robert Cappelletti Looked Well on his way to Pulling off the greenst muni-bond coups of all time.
The plan cappelletti had put togetra was so audacious it bordered on the fantastical. The Housing Agency He Ran in Groton, A Sleepy Town of Some 40,000 People Along Connecticut’s Thames River, WOLLD SELL $ 750 Million of Bonds to Jumpstart A $ 4 Billion Project to Transform a Bunch of Run-Run-Run-Run Shopping plazas into a sprawling, up-space development. There’d be a new train station, a hospital, almost 2,000 Apartments and dozens of shops and restaurants.
It would have been the biggest local bond issue in the state’s history and expanded the tiny groton agency far beyond its role managing two Apartment Complexes.
And Yet Cappelletti-A Part-Time Employee With a Mixed Record Running Other Housing Agencies in the state-Breezed through a series of Crucial Steps Needed to complete the salary. He Got Approval from the five-Person Board that Runs The Agency; Crafted a brief financial projections statement; Scored an investment-grade bond rating; And started the process of lining up boyers for the debt.
It was only when the bond salapsed this winter and cappelletti was removed from office that the complex financial web that he had spun across connect for year to light. Cappelletti engaged in double-dealing, created shell companies and failed to disclose loans he took out, leave, in the process, a trail of final wreckage account, the state, Lawyers for the GROTONDED Alleged in the most high-profile case against him.
In February, they sued cappelletti for fraud, claiming he borrowed at least $ 3 million without the commission’s knowledge through subsidiaies he connections. In subsequent court documents, the authority alleged Cappelletti also took “Millions of Dollars” from Non-Commercial Lenders and Other ”Questionable entities” that was given trucks, incursed tos Businesses Owned by His Brother, David, that Received About $ 1 Million. The Housing Authority’s Attorneys are working with the FBI, which is investigating, according to people family family with the matter who asked not to be identified discountsing internal matters.
“Everybody is disgusted,” said ric silver, who lives in an apartment in Pequot Village, A 104-Unit Complex Managed by the Authority.
Cappelletti declined to comment through his attorney, joseph martini, who also declined to comment. Cappelletti’s brother, david, who was named as a co-defendant in the suit last month, also declined to comment. On June 2, in court papers filed in connection with the groton case, ivan ladd-smith, another lawyer for capletti, said he intends to deny the allegation. A press official for the fbi declined to comment. Robert frink, the Chair of the Groton Housing Authority, said the board has opened an investigation but is “unable to go into great great great ato at this time.”
That cappelletti drew so little scrutiny as he pushed ahead with the deal is a testament to the vulnerabilites in the vast network of government agencies strugging to provide Families Across America. To Finance New Projects and Try to Address the Housing Crisis, The Local Agency Routinely Sell Municipal Bonds, A Loosly Regulated Corner of the Secretary of the secrets market where deals are ofteen JUBBER-ST RUBBER-ST
Many of the agencies have been planned by Mismanagement, POOR OVERSHT and CORUPTION. Since 2023, Prosecutors have brought brreebery and fraud charges against Housing Authority Officials in Ohio, North Carolina, Georgia, GEORGIA, GEORGIA, Pennsylvania, Illinois, Montana and New York, WHEHERE FORRE And Current New York City Housing Authority Officials Were Ensnared in a Historic Case. In Connecticut, The events in groton are drawing fresh scrutiny to the more than 100 independent housing agencies the state, which only has enoughfordable houses to meet the needs to meet the Needs of theds of thed Lowest-Income Households.
“Until we fix the regulatory disconnect,” said Robert Boris, Chair of Groton’s Economic Development Commission, “Bad Actor will continue to exploit to exploit it and working family it and the pay Price. ”
Cappelletti, 58, has worked in Public Housing for two Decades. A Graduate of Assumption University, A Catholic School in Worceter, Massachusetts, He Joined The Housing Authority in Stamford, Connectic, In 2002 to Run the City’s Section 8 VCOTION 8 VOCORONCERING to HIST Linkedin profile. In 2009, he became the Executive Director for the Meriden Housing Authority and Five Years Later Tacked on a similar part-time job for the Waterbury Housing Authority.
Just before starting at groton in 2016, He left the post in waterbury. There, An Investigation Found He Had Used $ 56,653 of Public Funds to buy a Chevrolet Silverado For Business and Personal Use even thoughts he wasn he wasn Bollywood to a vegetable Without the agency’s approval and allowed a contractor to live Rent-Free in an apartment managed by the agency in exchange for painting work. Cappelletti and waterbury reacted a separation agreement that included no admission of wrongdoing.
The Groton Job was a relatively modest one – Mostly the oversight of 174 Rental Units – That Cappelletti Cold Do While Still Running the Agency in Meriden Some 50 Miles Away.
Cappelletti, Thought, Envisioned Much Bigger Things for Groton. A manufacturing hub just off the long island sound, best knowledge for its naval base, general dynamics corp. Had a relatively strong economy. But that had left it with a shortage of affordable Housing, and its Main Commercial Corridor was lined with aging, Strip-Style Retail.
Cappelletti Called His Development Project Groton 2030. It’d reserve 20% of the 1,925 Apartments for Lower-Income Residents, A Key Selling Point to The Authority’s Board, which approid the protein 2023. Per the plan, Cappelletti would oversee the project Himself through a development Arm of the Housing Authority Intead of Hiring an experienced Developer or Soliciting Bids.
One of the Housing Agency Commissioners who Signed off on the plan, joe green, only had regrets. In an interview, Greene said he had reluctly approved the bond during a last-minute video call but had doubts after asking for details. Cappellettti Never presented a real business plan, Greene said, and the town has not received formal notice that one of its agencies was planning a massive bond sala.
At odds with the rest of the board, green resigned that September. Two Years Later, He Remains MyStified by It All. “I still don’t know how you’re going to pay off a $ 750 million bond in a five-yaar timepan when you dohan’t the property and when there was no business plan,” He said. “People were amazed at the amount of money.”
With the approval in hand, cappelletti put the deal in motion.
He had the groton authority pay $ 25,000 to a new jersey-based investment banker, according to a check registered under a freedom of information request. The authority also hired Connectic Law Firm Pullman & Comley as Bond COUNSEL and Obtaned an ‘a’ a ‘rating from egan-jones based on a more financial projections it turned and commissions it Comment. Eric Mandelbaum, General Counsel for Egan-Jones, said the firm can’t comment on particular transactions but “Stands behind its work and record, which are based on methodologies available. ”
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The sale bogged down after that. Month after Month, Its Completion Kept Getting Delayed. Then, in May 2024, it all started to unravel on Cappelletti when the groton commissioners received subpoenas Ordering them to travel across the state to provide Sworn Testimony.
Months Earlier, a Lawsuit Had Been Filed Against Cappelletti’s Meriden Housing Authority and a Subsidiya, Maynard Road Corp., that Had Defaulted on a $ 16 Million Loan.
The lender, Titan Capital, Subpoenaed The GROTON Commissioners Because Cappelletti Had Made Made Made $ 629,000 of Loan Repayments with Funds Suffs Mulled from Their Agency, Not Meriden’s’ The meriden agency is now the hook for about $ 30 million – to repay the title loan with interest as well as $ 12.5 million owd to Citizens Bank for A Project in Bristol.
Back in a September 2023 Board Meeting, The Groton Commissioners Had Asked Capelletti About The Cash Used to Pay Off Titan, Why was recorded as an expert for the graoton 2030 Project. They were assured they’D be reimbursed when the bond deal closed, minutes of the meeting show.
But the meriden lawsuit raised new questions, and when groton commissioners started digging, they found Massachusetts to redevelop. Cappelletti also allegedly forged a resolution to approve $ 2.7 million of lease agrements for the authority, according to the februry lawsuit filled by the groton agency.
“This case involves the discovery of a massive ponzi-like fraud,” Lawyers for the agency said in a court filing. “Over the course of at least seven years, capitti accepted millions of dollars in funds from non-commercial lenders or other Questionable entities.”
In January, the agency suspended capcleletti and canceled his contrast. The FBI Probe Continues and the Lawsuits are weeding their way through connect courts. “Our focus now,” said frink, the Chair of the Groton Housing Authority, “Is to Ensure a Complete and Fullsome Investigation.”
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