North Kingstown Contractor, Wife Facing Federal Bankruptcy Fraud, Money Laundering Charges

NORTH KINGSTOWN, RI — A North Kingstown contractor who "flipped houses" and his wife are facing federal fraud and money laundering charges after prosecutors said they concealed homes, properties, and other substantial assets from the U.S. Bankruptcy Court in Providence, U.S. Attorney Zachary Cunha said Tuesday.

According to court documents, Ernest Ricci and his wife, Brenda Ricci, have been accruing large, outstanding debts to creditors and to the IRS since 2004. Prosecutors said the couple have schemed to evade their creditors since 2011.

In October 2017, Ernest Ricci filed a chapter seven bankruptcy petition to protect a 1.5 million dollar home in Florida that he and his wife used as both rental property and a vacation home. Bank records indicate that Ernest Ricci failed to make any mortgage payments on the property since at least 2012.

Prosecutors said Ernest Ricci and his wife concealed assets and knowingly made false representations and omissions in filings with the U.S. Bankruptcy Court. Specifically, according to court documents, Ernest Ricci swore under oath that he had been unemployed for many years; that he had no income, no bank accounts, and no assets or properties other than the Florida home. Prosecutors said Ernest Ricci also claimed he garnered no compensation from his wife’s company.

In those bankruptcy filings, Ricci at first claimed liabilities in excess of $200,000,000 against assets of $1.3 million. According to prosecutors, he later amended his filings to claim liabilities of more than $2.3 million.

But in reality, according to prosecutors, before filing for bankruptcy, Ernest Ricci transferred all the assets of his business, Premier Home Restoration LLC, to shield those assets from his creditors.

Ernest Ricci claimed in bankruptcy filings that, following the transfer of the company’s assets, he performed services for Premier without compensation. But prosecutors said an investigation determined he continued to control the business, ran its day-to-day operations and used company money to maintain his lifestyle.

Prosecutors said Ernest Ricci also failed to truthfully disclose his monthly income, rental income from his Florida property and income from property he owned in New Hampshire, failed to claim a Rolex watch as an asset after producing a fake watch for the bankruptcy trustee to examine, and failed to disclose ownership of a boat he was offering for sale as late as February 2023.

Additionally, Ernest and Brenda Ricci lied under oath that Ernest Ricci held a $200,000 mortgage in the name of another person for the New Hampshire property that, in fact, he owned and for which he was collecting rent, prosecutors said.

After the bankruptcy trustee was declared as the owner of Premier, Ernest and Brenda Ricci fraudulently applied for COVID-19 relief programs, including the U.S. Paycheck Protection Program (PPP) and the Economic Injury Disaster Loans (EIDL), supposedly to pay Premier employees and company expenses. When filing, they failed to disclose that the Trustee was the owner of Premier, and that they were involved in bankruptcy proceedings, prosecutors said.

After getting the COVID-19 relief funds, prosecutors said the Riccis laundered money by conducting a series of financial transactions designed to conceal the location, ownership, and control of the PPP and EIDL proceeds, and to use those funds to purchase rental property in Warwick in another person's name.

Prosecutors said court documents detail a number of stalling tactics, frivolous pleadings, and fraudulent claims by Ernest Ricci, including claims he was indigent, during the years-long bankruptcy proceedings. Documents also detail numerous combative emails/texts sent by Ernest Ricci to the bankruptcy trustee, some of which were laced with profanities.

FBI agents arrested the Riccis on Friday. Ernest Ricci was charged with bankruptcy fraud, wire fraud, and money laundering. Brenda Ricci was charged with aiding and abetting bankruptcy fraud, aiding and abetting concealment of assets in bankruptcy, aiding and abetting wire fraud, and aiding and abetting money laundering.