Former housing authority official accused of ‘massive Ponzi-like fraud’
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Robert Cappelletti is accused of orchestrating “a massive Ponzi-like fraud,” but it would be hard to accuse him of thinking small when it comes to issuing bonds.
Cappelletti, the now former executive director of the Groton Housing Authority in Groton, Connecticut, had once appeared to be on his way to pulling off a plan where $750 million of bonds would be sold to kickstart a $4 billion project to transform run-down shopping plazas into an upscale development, according to a
“The bond approval that I voted on was for $750 million,” Joseph Greene, a former GHA commissioner who left the board shortly after that bond issue was approved in 2023, said in an interview Monday.
One of the reasons Greene left the board was because of his “apprehensions about the bond issue,” he said. Though he initially voted to approve it, Greene later regretted his decision. Wanting to know more, he reached out to officials at the state level.
“And everybody I talked to in state government was like ‘Wow, that’s a lot of money,'” he recalled.
Greene subsequently told the board that he was relinquishing his vote and made a formal presentation to his fellow commissioners about why they should not go along with the bond issue that Cappelletti was recommending.
“And we had another vote, and it was four to one,” he said.
That all happened before Cappelletti was terminated from his position at the housing authority, which in February sued him and another ex-employee, Jamie Lee. The case, which was filed in New London Superior Court, has been transferred to the complex litigation docket in Hartford. An FBI spokesperson last week declined to comment on news reports that the FBI had launched a probe into the alleged fraud.
“This case involves the discovery of a massive Ponzi-like fraud orchestrated by former GHA executive director Robert Cappelletti,” plaintiffs GHA and Greater Groton Realty Corp., a non-profit affiliate of the GHA, said in an April court filing.
The plaintiffs bring claims of breach of fiduciary duty, violations of the Connecticut Unfair Trade Practices Act, common law fraud and civil conspiracy against Cappelletti and Lee, a June court document said.
“These claims stem from the mismanagement of millions of dollars of Plaintiffs’ money and construction equipment that were intended to be used for the benefit of low-income residents of Groton,” the June document said, adding that Cappelletti “abused his position of trust and power, and his actions were in concert with Lee, who was formerly employed by GHA as the property manager.”
Cappelletti was GHA’s executive director from 2016 until he was suspended on Jan. 12, according to the plaintiffs’ Feb. 21 complaint. Following his suspension, GHA voted to cease a work sharing agreement with the Meriden Housing Authority, “effectively terminating Cappelletti,” the complaint said.
Despite the lawsuit and his termination, GHA’s website as of Monday still listed Cappelletti as GHA’s executive director.
John Burt, Groton’s town manager, said GHA did not come to the town with details of the bond deal. Housing authorities in Connecticut have their own ability to bond and the role of towns is only to appoint the authorities’ commissioners, Burt said last week. Robert Frink, chair of GHA’s board of commissioners, did not respond to attempts to contact him via phone and email.
GHA manages two moderate income elderly and disabled housing complexes, according to its website.
An attorney representing Cappelletti declined to comment in an email sent Friday. Also in an email on Friday, an attorney representing Lee said that he “will be filing pleadings in the future, which will speak for themselves.”
