The Johnson Controls board of directors said chief executive officer Alex Molinaroli’s involvement with a Ponzi schemer has no relevance to the company.
Molinaroli was listed in West Palm Beach, Fla., court transcripts as one of a large number of investors who loaned money to Joseph P. Zada of Grosse Pointe Shores, Mich.
Zada was found guilty in September of 15 counts of mail fraud in a $50 million Ponzi scheme that spanned 10 years, according to a press release issued by the Southern District of Florida United States Attorney’s Office.
The court transcripts state Molinaroli gave Zada “millions of dollars” since 2006 and also that Zada lived in a Michigan mansion owned by Molinaroli.
“The board is confident that Alex Molinaroli’s involvement in the Zada case is an unfortunate personal matter that has no relevance to Johnson Controls,” said Bill Lacy, from the Johnson Controls board of directors, in a statement. “Alex has the board’s full support as chairman and CEO. Under his leadership the company has delivered strong operating results while simultaneously undergoing a strategic transformation designed to drive future growth.”
“Like many others, Mr. Molinaroli was a victim of Zada’s scheme, not an accomplice,” added Fraser Engerman, director of global media relations for the Glendale-based Johnson Controls. “He has not benefited from it in any way. While Zada may have utilized some funds from Molinaroli’s loans to support his legal defense, it was always Molinaroli’s hope that this would ultimately facilitate repayments to all victims – including himself. As with the other unfortunate victims in this matter, Mr. Molinaroli continues to hope but no longer expects he will recover his losses.”
Molinaroli was not available for comment himself.
In addition to Molinaroli, the U.S. Attorney’s Office press release indicated other victims as an internationally acclaimed hockey player, a former Olympic equestrian champion, a veterinarian, a jeweler, and a pawnbroker, as well as a number of firefighters.
Zada told the victims that he was investing their money in oil and currency trading through a top-secret board headquartered in London. He never invested their money, but instead squandered it on a lavish jet-set lifestyle, which included mansions in Florida and Michigan, the press release said.
The victims were defrauded out of more than $50 million. When pressed to return the investment money, Zada claimed he was awaiting a billion dollar inheritance from a member of the royal family of Saudi Arabia, but the inheritance never materialized.
Zada, who is formerly of Wellington, Fla., faces up to 20 years in prison for each of the 15 counts. His sentencing is scheduled for Nov. 20.
This is not the first scandal involving Molinaroli since becoming CEO of Wisconsin’s largest public company in 2013.
He was found to have failed to comply with the company’s ethics policy in late 2014 when he engaged in a relationship with a consultant for the global multi-industrial firm. As a result, his fiscal year 2014 Annual Incentive Performance Program payment was reduced by 20 percent.
