Suburban man charged in Ponzi scheme

A detention hearing will take place Thursday in Rockford for a suburban man accused by federal authorities of defrauding about 40 investors from Illinois and several other states.

The federal complaint charges Paul Joseph Cirigliano, also known as Paul Cirano, with mail fraud and other crimes, including operating a Ponzi scheme from which authorities say he received about $1.8 million between 2004 and June 2010.

A Ponzi scheme requires an individual to continually solicit new investors to make promised interest payments to earlier investors.

Cirigliano, who authorities say lives in Fox River Grove, owns Panoptic Studios, a Wauconda company that creates graphics, video and websites, according to the federal complaint. Panoptic Studios is a preferred vendor for Proforma, which supplies print and promotional products, authorities said. The complaint alleges Cirigliano solicited investments from owners of Proforma franchises, who he befriended during Proforma’s required multimedia certification courses.

Cirigliano told investors he would use the money to purchase used analog video production equipment from U.S. companies and sell the equipment to smaller companies here and in South America that still use the outdated format, the complaint alleges.

Authorities say Cirigliano promised investors as much as a 20 percent return within 30 days. Victims of the scheme include residents of Lake Barrington, Schaumburg, Elmhurst and Frankfort, Illinois as well as Michigan, Wisconsin and Ohio, authorities said.

According to the complaint, the owner of the Wauconda office building that houses Cirigliano’s Panoptic Studios told authorities he observed Cirigliano packing up the office on Feb. 4. The building’s owner questioned him about the sudden departure and the $20,000 in back rent Cirigliano owed, the complaint alleges. Authorities say Cirigliano told the man he needed a fresh start and was moving to Costa Rica at the end of the month.

His criminal background includes a 1991 federal conviction in Rhode Island for failing to file a currency transaction report and a 1992 conviction in Florida for larceny, according to federal authorities.