Valencia Man Gets 26 Months in $1.4-Million Fraud

A Valencia businessman who bilked nearly 130 investors out of $1.4 million was sentenced in federal court Thursday to 26 months in prison and ordered to make restitution.

Robert James Chiappetta, 34, pleaded guilty three months ago in U.S. District Court in Los Angeles to two counts of mail fraud in connection with the operation of two Valencia investment companies, Comp-U-Count and RJ Trading, Assistant U.S. Atty. John F. Walsh said.

The crimes were punishable by a maximum sentence of 30 months.

Over the course of 18 months in 1988 and 1989, Chiappetta fraudulently obtained more than $2 million from investors by falsely representing himself as an experienced options trader whose program guaranteed enormous financial gains, Walsh said.

Chiappetta also said the two companies had a history of making substantial profits on investors’ money.

But, Walsh said, Chiappetta had no experience as an options trader, and his companies “had never made any money.”

Chiappetta also diverted about two-thirds of the money for personal expenses.

He prepared and distributed phony financial statements to investors to cover up his losses, Walsh said.

By August, 1989, “Chiappetta had squandered or lost nearly all of the money invested by nearly 130 investors in the two companies,” Walsh said.

Judge John G. Davies ordered Chiappetta to repay the investors. Prosecutors said they doubted he could make full restitution.