Authorities to seek assets of father-daughter team

Thursday, August 24, 2006 The prosecutor said the two shouldn't be enjoying their assets. By PETER H. MILLIKEN VINDICATOR STAFF WRITER CLEVELAND — The man who prosecuted the Prokop insurance father-daughter team for lying about clients' investments said his office will do everything it can to identify the pair's assets to enforce court-ordered restitution to investors. Some of those investors said they lost their life savings in dealings with the pair. "We want to see proof of what their assets are," Assistant U.S. Attorney Christian H. Stickan said after U.S. District Judge Donald C. Nugent issued the $15.3 million restitution order against the duo Wednesday. Judge Nugent ordered John E. Prokop, 77, of Barbie Drive, and his daughter, Lisa (Rosati) Tokarsky, 45, of Samuel Court, both of Boardman, to make $15.3 million in restitution. "They'll be responsible for revealing to the court whatever assets they do have. If they have assets, they shouldn't be enjoying them," Stickan said. He added that the two are obligated by their plea agreements to make ongoing financial disclosures to his office and to the court. Both defendants appeared in federal court wearing jail uniforms and handcuffs. Prokop is housed at the Corrections Corp. of America prison in Youngstown, and Tokarsky is lodged in the Ashtabula County Jail. Both await transfer to a federal prison. In the courtroom audience were about a dozen people, some of them investors from the greater Youngstown area who said they lost money in their dealings with the Prokop insurance team. Sentences Last month, Judge Nugent sentenced Prokop and Tokarsky to a year and a day in federal prison, followed by three years' probation, and ordered them to make restitution. The U.S. attorney's office filed a list of about 500 investors. The judge adopted the recommendation of U.S. Magistrate Kenneth S. McHargh, but the judge called for a slightly lower total than the $15.5 million estimated by McHargh, who handled details of the restitution. In his report and recommendation, McHargh said restitution should be made only for actual losses, and any benefits received by the investors should be subtracted from the restitution award. The judge arrived at the lower figure because he had information about payments made to some other investors, which the magistrate didn't know about, Stickan explained. "This is always a moving target," the judge said of the exact restitution due, adding that he can modify his order if new information justifies a change. Investors with questions about their entitlements and payments should contact the U.S. District Court clerk's office or the victim-witness advocacy office of the U.S. attorney's office in Cleveland, Stickan said. Any assets of substantial value owned by Prokop or Tokarsky may be sold to make restitution, Stickan said, adding that Tokarsky, who has filed for bankruptcy, won't be able to escape her restitution obligations through U.S. Bankruptcy Court. No false hope The restitution amount could be reduced by any payments investors receive from the failed companies they invested in through Prokop and Tokarsky, Stickan said. As to the likelihood that investors actually will get their full restitution entitlement, Stickan said: "It's a large amount of restitution. I don't want to offer any false hope to anybody." Atty. James A. Jenkins of Cleveland, who represents Tokarsky, told the judge, "Lisa appreciates the fact that it's an ongoing matter that requires her full cooperation. ... We're not hiding anything." At the July 14 sentencing hearing in Youngstown, the packed courtroom included many investors, some of them supportive of Prokop and Tokarsky and others complaining they lost their life's savings in their investments with the pair and asking the judge to impose maximum sentences. Making restitution was one of the terms in the plea agreements for Prokop and Tokarsky, who were well-known for selling "guaranteed, no-risk" investments from Pro Insurance through radio and TV ads. The two were indicted on more than 30 fraud and money laundering charges, but pleaded guilty only to lying about clients' investments. Prokop pleaded guilty to four counts of making false declarations under oath, and his daughter pleaded guilty to two counts of the same offense. The plea agreements don't prevent civil lawsuits or state criminal charges' being filed. Fraud and money laundering charges were dismissed in exchange for the duo's guilty pleas April 28. The false statements were made during depositions in 2005 in a civil lawsuit brought by investors from Youngstown, the government said. The case involved an alleged scheme to defraud investors in pay phones, insurance contracts and automated teller machines. The indictment, returned last August, states that from 1997 to 2002, the duo conspired to commit mail, wire and securities fraud. The indictment says Prokop and Tokarsky falsely claimed in their advertisements that the nontraditional investments they sold had no risk and guaranteed a high rate of return. The government said they sold more than $9.8 million in pay phones, $6.2 million in settlements that allows you to invest in another person's life insurance policy, and $855,000 in ATMs and collected nearly $2 million in commissions.