Date: May 28, 2024 Contact: newsroom@ci.irs.gov PROVIDENCE — A self-employed contractor who waged a multi-year campaign of fraud, harassment, and abuse in the United States Bankruptcy Court, and who executed multiple schemes; made false representations; intentionally obstructed proceedings; and suborned perjury, all to conceal substantial assets from the bankruptcy court, has been sentenced to three years in federal prison, announced United States Attorney Zachary A. Cunha. Additionally, Ernest P. Ricci of North Kingstown, previously admitted to a federal judge that he fraudulently applied for and received COVID-related Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL) from the Small Business Administration (SBA), money that he laundered in an effort to conceal it from the bankruptcy court. Ricci was sentenced today by U.S. District Court Chief Judge John J. McConnell, Jr., to 36 months of incarceration to be followed by three years of federal supervised release. Ricci was also ordered to pay restitution in the amount of $129,306 to the SBA and $77,568 to the IRS, jointly and severally with his wife. He pleaded guilty in November 2023 to charges of bankruptcy fraud, obstruction, suborning perjury, wire fraud, and money laundering, In October 2017, prior to filing a Chapter 7 Bankruptcy petition in an attempt to protect a $1.5 million dollar home in Florida that he and his wife used as both rental property and a vacation home, and on which he had failed to make any mortgage payments for approximately five years, Ricci transferred all of the assets of his business: Premier Home Restoration LLC (Premier), to his wife. He then falsely submitted documents to the Bankruptcy Court, under oath, indicating that he had been unemployed for many years, that he had no income, that he garnered no compensation of any kind from his wife’s company, that he controlled no bank accounts, and that he had no assets or properties other than the Florida home. In fact, it was determined, Ricci continued to control Premier after he transferred the company to his wife; that he ran its day-to-day operations; and that he made use of income from the company to maintain his lifestyle, none of which he disclosed to the Bankruptcy Court. Additionally, Ricci failed to truthfully disclose rental income from his Florida property and from another property that he owned in New Hampshire; and that he was untruthful when he claimed that he held a $200,000 mortgage in the name of another person for the New Hampshire property when, in fact, he owned the property himself and was collecting rent, and that he convinced that person to commit perjury before the bankruptcy trustee. In addition to the schemes employed by Ricci to hide assets and mislead the Bankruptcy Court, after the Bankruptcy Trustee was declared to be the equitable owner of Ricci’s former company, Premier, Ricci fraudulently applied for COVID-related PPP EIDL loans from the SBA, purportedly to pay Premier employees and company expenses. When filing loan applications, Ricci failed to disclose that the Trustee was the owner of Premier, and that he and the company were involved in bankruptcy proceedings. After obtaining the EIDL and PPP loans, Ricci laundered the proceeds by conducting a series of financial transactions to conceal the location, ownership, and control of the COVID support payments which he used to purchase rental property in Warwick, RI, in the name of another person. Court documents detail a number of stalling tactics, frivolous pleadings, and fraudulent claims by Ernest Ricci, including claims that he was indigent, during the years’ long bankruptcy proceedings. Documents also detail numerous combative communications sent by Ernest Ricci to the bankruptcy Trustee, some laced with profanities. The case was prosecuted by Assistant U.S. Attorney John P. McAdams. The matter was investigated by the Internal Revenue Service Criminal Investigation (CI), FBI, and the United States Bankruptcy Trustee. CI is the criminal investigative arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft and more. CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, obtaining a more than a 90 percent federal conviction rate. The agency has 20 field offices located across the U.S. and 12 attaché posts abroad.
