He triggered a banking crisis in RI. Now embezzler says he can't meet restitution payments

PROVIDENCE – Rising prices are pinching everyone, even Joseph Mollicone Jr., the once fugitive embezzler whose thievery triggered Rhode Island’s banking crisis three decades ago. 

With soaring costs in mind, Mollicone, 79, on Tuesday asked to reduce the $270 restitution payment he makes to the state each month.

“There is no way Mr. Mollicone can make the payments the court ordered,” his lawyer, Louis M. Pulner, said in Superior Court.

Mollicone is experiencing a budgetary shortfall “each and every month” and has recently incurred added expenses, including $1,900 for hearing aids, unforeseen car repairs and “skyrocketing” utility costs, Pulner told Magistrate Gina Lopes.

The state has no reason to doubt Mollicone’s reported financial woes, but cannot agree to a reduction in the monthly payment, Assistant Attorney General Patrick Youngs said.

More on Mollicone:WHERE ARE THEY NOW?: Embezzler Mollicone working two jobs to pay back R.I.

“Restitution payments should hurt,” Youngs said. “I think he should try his best.”

Mollicone was among a parade of people to appear before Lopes Tuesday, detailing lost jobs, struggles to find housing and other strife. He appeared nondescript in slacks and loafers, with only the scope of his crimes setting him apart.

“The court is cognizant of the situation. This court hears it everyday,” said Lopes, who presides over the cost, fines and restitution calendar.

Still, Lopes said she could not square with “rewarding” Mollicone by reducing the monthly sum.

“There are victims out there who are still affected by this,” Lopes said.

Lopes and Youngs agreed to monitor Mollicone’s payments

“Mr. Mollicone will never pay it off,” Youngs acknowledged.

How much has Mollicone paid so far?

Mollicone has paid $50,457.50 toward his restitution, according to Lexi Kriss, spokeswoman for the courts. That leaves $12,455,916 remaining as of Monday, court records show.

Mollicone has made payments each month since his release in 2002, money that heads to the state Division of Taxation and then into the General Fund, according to state officials. He owes another $506,000 in fines, fees and costs — debts that won’t be touched until he satisfies his restitution.

Mollicone triggered one of the worst banking crises in RI history

Mollicone’s looting of Heritage Loan & Investment Co., helped trigger the state’s plunge into the worst banking crisis since the Great Depression. It’s said that one out of every three Rhode Islanders was hurt by his theft at the time of his crimes.

He began stealing from Heritage Loan as bank president in the mid-1980s after inheriting it from his father. He skimmed an estimated $15.2 million altogether, though he was prosecuted for $12 million in losses.

More on restitution:Failing to pay full restitution has kept people on probation indefinitely in RI. No more

Prosecutor Kevin Bristow told the court at Mollicone’s trial that the banker, who had a taste for fast cars and daring deals, had “bled” Heritage dry.  “[D]ay in and day out, week in and week out, month in and month out, year in and year out” he stole from friends, strangers, family.

Mollicone fled to Salt Lake City in November 1990 as his scheme was about to be unearthed. There he lived under the name John Fazioli, a childhood acquaintance who had died just before Mollicone fled. He posed as a Boston jewelry maker who had headed to Utah to ski and relax.

Heritage Loan failed as Mollicone hit the slopes, taking down the entire Rhode Island Share and Deposit Indemnity Corporation system, the private insurer for most of the state’s credit unions. Depositors were out hundreds of millions of dollars. The state eventually borrowed up to $350 million to reimburse them.

Mollicone surrendered in April 1992. A jury convicted him a year later of five counts of embezzlement, 19 counts of filing false bank entries and two counts of conspiracy.

Superior Court Judge Dominic F. Cresto imposed the harshest sentence ever to a white-collar criminal in Rhode Island: 40 years in prison, with 30 years to serve, restitution of $12 million to the state, and a $420,000 fine.

Mollicone’s parole expired on November 1, 2022, Matthew Degnan, spokesman for the state Parole Board, said in an email. He remains on probation until 2025.

This article originally appeared on The Providence Journal: Mollicone, who triggered RI baking crisis, asks to lower restitution