Prokop to get a year in jail, must repay $17M

Much of the hearing was devoted to testimony by bilked investors.
By NANCY TULLIS
VINDICATOR STAFF WRITER
YOUNGSTOWN -- The Prokop Insurance father-daughter team will return to federal court Aug. 23 to find out how they will repay investors who lost millions.
John E. Prokop and his daughter Lisa (Rosati) Tokarsky, well known for selling their "guaranteed, no-risk" wares from Pro Insurance through radio and television ads for many years, were each sentenced to 12 months and one day in federal prison plus three years' probation and were ordered to make restitution to investors.
Federal Judge Donald C. Nugent of U.S. District Court, Northern District of Ohio, said a federal magistrate will handle the details of the restitution. As part of their plea agreements, Prokop and Tokarsky must make nearly $17 million in restitution to investors.
The names of roughly 500 investors were filed under seal. The plea agreements do not prevent civil lawsuits or state criminal charges, according to the plea agreements.
Judge Nugent ordered Tokarsky on Friday to make a full disclosure of her finances, including account transfers, and to make all of her financial records available for review. Tokarsky was to have made full disclosure before Friday's sentencing but did not.
Judge Nugent said Prokop and Tokarsky faced four to 12 months' incarceration. He said he could choose to give them more or less time than the maximum, but they also qualified for probation with home confinement.
Victims speak
Much of the nearly three-hour hearing was devoted to testimony of investors, many of whom are elderly and retired and lost their life's savings and who pleaded for Judge Nugent to impose the maximum prison term. The courtroom was full, and about 30 people, most of them investors, watched on closed-circuit television from a nearby room.
Prokop, 77, of Barbie Drive, and Tokarsky, 45, of Samuel Court, both of Boardman, were indicted on more than 30 fraud and money laundering charges but pleaded guilty only to lying about clients' investments.
Fraud and money laundering charges were dismissed in exchange for the duo's guilty pleas April 28 to charges of 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.
Attorneys Patrick M. McLaughlin and James A. Jenkins, defense counsels for Prokov and Tokarsky, respectively, read excerpts from investors who continue to support Prokop and Tokarsky. Several others made statements in court.
McLaughlin read statements from several of Prokop's friends and investors without identifying them. Most used phrases like "honest, trustworthy, kind, ethical, God-fearing and very dependable" to describe Prokop.
Supporters' testimony
"I never had a problem with them ever," said Carolyn McCamon. "They helped me with my two [mentally handicapped] brothers and helped me provide for them. I got all the information I needed."
Several who supported Prokop and Tokarsky said they did not sue even though they lost money because they were never pressured to make the investments, and the decision to invest was their own.
McLaughlin said Prokop and Tokarsky got involved in nontraditional investments, which they invested in themselves, and the leaders of the companies committed fraud. He said "John and Lisa were duped and personally lost in these investments."
Cosmo DeBartolo said he has known Prokop since the early 1960s and is a "close, personal friend" in work, business and with his family. He said Prokop has always been "interested in my personal needs and has taken care of me well."
Msgr. Thomas Kelly of Youngstown Diocese said he has known Prokop for 32 years and spoke of Prokop's dedication to raising thousands of dollars for Kiwanis Club charities. He said Prokop is sincere, hard-working, upright and honest. "I can't believe we're in the court," he said. "I'm sure he was deceived by these companies."
Both Prokop and Tokarsky made statements before they were sentenced. Tokarsky could say little but that she was sorry. Prokop apologized to investors.
"Lisa and I deeply regret these investments failed," he said. "When I sold ATMs and phones, they were good deals."
Regarding the guilty plea for making false statements under oath, Prokop said he had no excuse because he knew it was wrong. He told the judge that he hoped the judge would "look at all my work and my life of helping people." Prokop and his only child were indicted in August 2005. They have each been free on $10,000 unsecured bond.
The charges
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).
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 trying 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.