April 21, 2021

Court allows Bangor man on probation for loan scheme to go on Caribbean ‘voodoo’ cruise

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mc-blue-mountain-cinelli-caribbean-cruise-2016-001By Peter Hall From The Morning Call

While investors seek to get back their money, Francis Cinelli Jr. will go on a cruise.
Francis “Mooch” Cinelli Jr. will sail the high seas on a Caribbean cruise for believers in the paranormal later this month.

Meanwhile closer to home, people who claim to be victims of his father’s failed loan agency said they will keep pushing a raft of lawsuits seeking more than $10 million in lost investments toward a trial in Northampton County Court.

Cinelli Jr., who is serving a five-year probationary sentence for tax evasion tied to the collapse of his father’s Blue Mountain Consumer Discount Co., received a judge’s approval for the seaborne sojourn in late January.

Lawyers representing some of the dozens of people in the Slate Belt and beyond who lost their life savings when Blue Mountain collapsed said they were surprised by Cinelli Jr.’s travel plans.

“I’ve been doing this for a long time, and even I have not had the chutzpah to ask a judge to allow one of my clients to go on a cruise,” said Easton attorney Gary Asteak.

Cinelli Jr., 51, of Bangor, and his father, Dr. Francis J. Cinelli Sr., 89, were charged with tax offenses in 2014, more than four years after the FBI raided Blue Mountain’s office in Wind Gap and Cinelli Sr.’s home and medical practice in Bangor.

Civil suits contend Cinelli Sr. used investors’ money to buy a waterfront condo in South Carolina, a Bushkill Township horse farm for his daughter and to build a new home for Cinelli Jr. in Bangor.

Asteak represents a number of people suing what’s left of Blue Mountain, its owner Cinelli Sr. and others who allegedly benefited as the company spiraled into insolvency.

“My clients are not going to be happy to hear this, nor are the other plaintiffs,” he said.

U.S. District Judge Jeffrey Schmehl granted Cinelli Jr.’s request for a break from his probation’s limitation on travel outside of Pennsylvania, allowing him to fly to New Orleans to join the cruise.

According to his request, Cinelli Jr. will serve as master of ceremonies and guest speaker aboard SpiriCruise: The Voodoo Voyage, a floating convention for believers in the paranormal. The cruise makes port calls in Montego Bay, Jamaica; the Cayman Islands; and Cozumel, Mexico before returning to New Orleans.

Bethlehem attorney Donald Souders, who defended Cinelli Jr. in his federal tax evasion case and filed the request for permission to travel, said the trip is perfectly reasonable.

Cinelli Jr. owns The Vitamin Pharmacy in Bangor, and is described as a holistic health care practitioner and paranormal investigator on the SpiriCruise website.

“It is essentially a business trip for him,” Souders said. “He’s going to speak on this issue and he has a history of working in this area.”

Assistant U.S. Attorney Mike Lowe, who prosecuted the Cinellis and two others on charges related to the Blue Mountain insolvency, said he did not object to Cinelli Jr.’s travel request.

“You’re talking about someone whose liberty has not been taken away,” he said. “For someone like Frank Jr., there would not really be a reason to deny a reasonable request to travel.”

Blue Mountain and Cinelli Sr. came under the scrutiny of the FBI and IRS in 2010 when investors complained that the agency had stopped making monthly interest payments on their loans.

Ultimately, prosecutors charged Walter “Buddy” Lambert, 74, of Plainfield Township with wire and mail fraud in 2014. He admitted falsifying records to cover up $2.3 million in losses while enticing new investments from unsuspecting lenders by promising them 10 percent returns, then using their money to satisfy earlier investors and meet the company’s operating expenses.

But Lowe said at the time investigators faced an insurmountable hurdle in determining how much money Cinelli Sr. had himself invested in Blue Mountain, and was therefore entitled to withdraw from company accounts.

Prosecutors instead charged Cinelli Sr. and his son with filing false tax returns that omitted about $500,000 in payments from family businesses, including nearly $100,000 from Blue Mountain Consumer Discount Co. They pleaded guilty in December 2014 and both received probationary sentences.

Also charged with tax fraud was Wind Gap attorney Nicholas R. Sabatine III, who admitted he failed to pay taxes on cash kickbacks for referring clients to invest in Blue Mountain and interest payments on his own investments. He also was sentenced to probation, and received a reprimand from the state Supreme Court for ethical violations as an attorney.

More than two-dozen lawsuits in Northampton County Court are moving toward trial this year. A preliminary trial is scheduled In April for Judge Michael Koury to determine whether Cinelli Sr., his wife and his daughters, and Lambert can be held personally liable for Blue Mountain investors’ losses, Easton attorney Ralph Bellafatto said.

A jury trial is scheduled in May when the investors’ attorneys will present evidence in support of their claims that Cinelli Sr. and Lambert’s “fraudulent” actions caused Blue Mountain’s collapse. Easton attorney Ralph Bellafatto, who represents some of the investors, said the trial may be delayed, however, because Lambert is expected to remain in prison until November.

A separate set of lawsuits filed last year alleges Cinelli Jr., his siblings and other relatives and Lambert’s wife, son and daughter were unjustly enriched and participated in a fraudulent conspiracy when they accepted benefits paid for with the lenders’ money.

IMAGE: Blue Mountain raid An officer stands at the entrance of Blue Mountain Consumer Discount Company, a financial firm and loan agency, at 228 S. Broadway in Wind Gap on May 5, 2011. (THE MORNING CALL FILE PHOTO)

For more on this story go to: http://www.mcall.com/news/breaking/mc-blue-mountain-cinelli-caribbean-cruise-20160207-story.html

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