BOARDMAN FBI raids office of Pro Insurance

A Warren lawyer says it appears the FBI is looking at mail fraud, for starters.
By PATRICIA MEADE
VINDICATOR CRIME REPORTER
BOARDMAN -- As part of a Ponzi scheme investigation that involves the sale and lease of pay phones, the FBI raided the office of Pro Insurance Agency on Boardman-Canfield Road, The Vindicator has learned.
A Ponzi scheme is an investment swindle in which some early investors are paid off with money put up by later investors to encourage more and bigger risks, according to the Merriam-Webster dictionary.
A source close to the investigation said more than 20 states and $436 million are involved in the Ponzi scheme.
Among the FBI targets are John Prokop and his daughter, Lisa Marie Tokarsky, who sold and leased coin-operated pay phones through Pro Insurance, according to documents obtained by the newspaper. Prokop is president of the company at 833 Boardman-Canfield Road.
"It appears the FBI gave my client a buon natale -- an early Merry Christmas," said Prokop's Warren attorney Maridee L. Costanzo, who confirmed the Tuesday raid. "They seized some documents, four boxes."
Likely allegations
The probe, she said, likely involves allegations of mail fraud and securities and exchange violations.
"The FBI has not released the four boxes they seized yet. I expect they will copy those and get them to me immediately," Costanzo said. "I'll need to review them before I can comment."
Costanzo said she knows there is "voluminous civil litigation" that involves her client and the investors. She said she would spend this weekend reviewing the complaints.
"It makes it difficult when there have been depositions given in civil proceedings, then the FBI moves in through the back door," Costanzo said. "It makes it cumbersome for any criminal defense lawyer, so I have a very cumbersome project and I'm going to meticulously work through it."
Prokop said in a deposition that his commission as agent for the pay-phone investments went from 8 percent or 9 percent to 12 percent.
FBI paperwork obtained by The Vindicator shows that agents have a list of 329 investors, most from northern Ohio, who have invested in excess of $9.7 million in the sale and lease-back of coin operated pay phones. The investments were made through the Prokop agency, Prokop or his daughter, the paperwork shows.
Pay-phone company
The FBI reviewed financial statements of ETS Payphones Inc. in Atlanta, which buys, sells and operates pay phones and establishes pay-phone routes. From July 1997 through August 2000, Prokop and his daughter offered for sale and lease-back phone investments from ETS to the general public, according to documents obtained by the newspaper.
A diagram of the alleged Ponzi scheme shows ETS at the top, Hayes Financial Group and Garmor Financial Services below that, then Pro Insurance.
Investors have told the FBI that Prokop and Tokarsky sold them pay phones for $6,000 to $7,000. The phones had been purchased through Hayes Financial Group and the checks, made out to Hayes, were delivered to Prokop or Tokarsky and forwarded to Hayes, according to FBI documents.
The investors would immediately lease the phones back to ETS for five years for a monthly payment of $82 per unit, representing an investment return of more than 14 percent. Investors received monthly checks from ETS until August 2000, when the checks stopped coming and all efforts to get refunds of their original investment proved futile, documents show.
Prokop, according to FBI documents, presented himself as a financial adviser and consistently told investors that their investment with ETS was safe and fully guaranteed and even compared the investments to government securities. He allegedly provided literature that stated "principal and interest guaranteed."
No investor was told that ETS was losing money, never made a profit from its inception or constantly required new investor money to sustain operations, FBI documents show. .