Published November 15. 2013 3:00PM Updated November 16. 2013 12:13AM
Norwich — Norwich businessman Zane Megos was arrested Friday by city police for violating a court order, six days before he was expected to decide whether to accept a plea offer on six larceny charges for allegedly swindling prospective tenants out of security deposits and rent for unavailable apartments.
Friday's arrest came after a four-month investigation by Norwich police investigator Steven Schmidt, acting on allegations Megos was still engaging in fraudulent rental transactions.
Megos was charged with violating conditions of his release.
Megos, 55, of 31 Dellwood Road, was free on bond on the six pending larceny charges and one third-degree assault case involving an alleged altercation with one of the victims and had been ordered by a New London Superior Court judge not to offer to rent or take any security deposits from anyone, police said.
After an investigation by The Day, Megos was charged last year by Norwich police in six separate cases for allegedly taking deposits and rent payments for apartments and houses in Norwich and New London that were either condemned or never became available.
Police said an official in the Norwich Planning and Development office witnessed Megos meeting with individuals in a shopping plaza off Salem Turnpike and engaging in what appeared to be financial transactions, consistent with his previous activities.
Schmidt tracked down the individuals meeting with Megos. They claimed they gave Megos a down payment for an apartment on North Main Street. After several delays by Megos they asked for their money to be returned, the victims told police, but they only received a portion of the down payment from Megos, Sgt. James Tetreault said in a written statement.
Norwich police detectives conducted an undercover operation, posing as prospective tenants interested in a separate property listed on Craigslist. During the investigation, police said, detectives spoke to Megos and his associates over the telephone and arranged for meetings in person.
The allegations are similar to what The Day investigation found last year. Nine people claimed they had paid Megos nearly $25,000 in cash deposits, but they were never able to live in the apartments and did not get their money back.
Megos was held on a $10,000 cash-only bond and is scheduled to appear Dec. 5 in New London Superior Court.
Friday's arrest comes as Megos was deciding whether to accept an offer by prosecutors to resolve his case short of trial by pleading guilty on misdemeanor charges. He was due to decide on the offer at a Nov. 20 court appearance in New London Superior Court.
Judge Hillary B. Strackbein told Megos on Oct. 23 he would face a possible sentence of up to 23 years in prison if found guilty on all the pending charges prior to Friday.
Megos was not eligible for accelerated rehabilitation because of a guilty plea in a 1983 first-degree larceny charge involving theft of insurance premiums.
Strackbein said the plea deal would reduce all charges in the cases involving housing deposits to misdemeanors.
Prior to Friday's arrest, Megos faced one count of second-degree larceny, a Class C felony carrying a prison sentence of one to 10 years and a fine of up to $10,000; two counts of third-degree larceny, a Class D felony carrying a sentence of one to five years in prison and a fine of up to $5,000; and three counts of fourth-degree larceny, a misdemeanor carrying a sentence of up to one year in prison and a fine of up to $2,000.
Megos also faces third-degree assault and breach of peace charges stemming from an altercation with one of the alleged larceny victims who had confronted Megos to ask for his deposit back.
Anyone with information regarding any similar criminal activity in the City of Norwich is encouraged to call the Norwich Police Department at (860) 886-5561, the anonymous tip line at (860) 886-5561, extension 500, or to send an e-mail to firstname.lastname@example.org.