Boardman father, daughter plead guilty in $17 million investment scheme

Restitution is nearly $17 million, and probation is the likely sentence.
By PATRICIA MEADE
VINDICATOR CRIME REPORTER
CLEVELAND -- More than 30 fraud and money-laundering charges will wash away when the Prokop Insurance father-daughter team is sentenced for lying about clients' investments.
John E. Prokop, 77, of Barbie Drive, and Lisa Marie (Rosati) Tokarsky, 45, of Samuel Court, both in Boardman, were in federal court Friday to plead guilty to making false declarations under oath. The false statements were made during depositions in 2005 in a civil lawsuit brought by investors in Youngstown, the government said.
Prokop said during the 75-minute hearing Friday that he is still in the insurance business. His daughter said she's on sick leave, suffering from severe depression related to her federal case.
U.S. District Judge Donald C. Nugent set sentencing for July 14. Based on the advisory sentencing guidelines, with acceptance of responsibility, Prokop and Tokarsky likely face four to 12 months' incarceration. In that range, they qualify for probation with home confinement.
Must pay investors
As part of their plea agreements, Prokop and Tokarsky must make nearly $17 million in restitution to investors. The names of roughly 500 investors will be filed under seal.
The plea agreements do not prevent civil lawsuits or state criminal charges, according to the plea agreements.
The case was prosecuted by Christian H. Stickan and Justin J. Roberts, assistant U.S. attorneys. It was investigated by FBI Special Agent Deane Hassman.
Prokop was represented by Cleveland attorney Patrick M. McLaughlin and Tokarsky by Cleveland attorney James A. Jenkins.
Prokop and his only child were indicted in August 2005. They have each been free on $10,000 unsecured bond.
The indictment charged them with conspiracy, 20 counts of mail fraud, nine counts of wire fraud, one count of securities fraud, one count of money laundering and one count of conspiracy to commit money laundering. Prokop was also charged with eight counts of false declarations (he pleaded guilty to four) and Tokarsky with four counts of false declarations (she pleaded guilty to two).
At sentencing, the conspiracy, mail, wire and securities fraud and money-laundering counts will be dismissed, according to the plea agreements.
Scheme alleged
The case involved an alleged scheme to defraud investors in pay phones, viatical (insurance) contracts and automated teller machines. The indictment states that from 1997 through December 2002, Prokop and his daughter conspired to commit mail fraud, wire fraud and securities fraud.
From 1997 through September 2000, operating as Pro Insurance and later as Pro Insurance Associates Inc. in Boardman, they expended significant sums of money to promote and sell nontraditional investments, the government said. They falsely claimed in radio programs and in the print media, including fliers, the Yellow Pages, newspaper and billboards advertisements, that the investments they sold were safe, had no risk and were guaranteed a high rate of return, the indictment alleged.
The indictment said they sold more than $9.8 million in pay phones, $6.2 million in viatical settlements and $855,000 in ATMs. They collected commissions of nearly $2 million, the government said.
Prokop and his daughter were accused of moving or attempting to move clients from one investment to another in order to keep investors' funds tied up with them, thereby earning commissions based on a percentage of the sales price. All the companies failed.