Five indicted in $14 million securities fraud scheme in Las Vegas
The Associated Press - Daily Herald Aug 9, 2003 0
LAS VEGAS -- Five people, including two Las Vegas attorneys and a former New York lawyer linked to the sale of FBI documents in 2001, have been indicted in a multimillion dollar securities fraud scheme, authorities said Friday.
A 64-count federal indictment unsealed Thursday charges Las Vegas attorneys Sean Flanagan, 35, and Daniel Chapman, 49; former New York attorney Herbert Jacobi, 63; disbarred Las Vegas lawyer Shawn Hackman, 35; and James Farrell, 54, a stock transfer agent from Salt Lake City.
Authorities said the various schemes involving the group and others netted at least $14 million. An investigation is ongoing to determine the exact loss amount. The men are charged with numerous counts, including mail fraud, securities fraud, money laundering and racketeering.
The indictment alleges Flanagan, Chapman, Hackman and Jacobi took over schemes begun in the early 1990s by Las Vegas businessman Peter Berney, who is awaiting sentencing in a related case.
"Corporate records were fabricated and documents were backdated to create the illusion that securities were issued in compliance with federal securities laws," the indictment said.
Authorities said the group formed shell corporations and arranged for them to merge with private companies. Another Las Vegas businessman, Robert Potter, allegedly anchored the scheme with Jacobi.
Potter was indicted in 2001 in Berney's alleged scheme.
Farrell is accused of using his company, Alpha Tech Stock Transfer, to transfer the stocks. Among shell corporations officials named Friday were Professional Mining Consultants and K-9 Protection Inc.
Farrell was arrested Friday morning in Salt Lake City and authorities have issued summonses for the other defendants. All are scheduled to appear Sept. 5 in U.S. District Court in Las Vegas.
Jacobi and Potter were key figures in a 2001 case involving the sale of documents stolen from the Las Vegas FBI office.
Both later pleaded guilty in New York to charges that they conspired to receive stolen FBI records pertaining to the fraud investigation.
At a news conference Friday, officials said 20 people involved in the schemes have been charged.
A message left at the law offices of Chapman and Flanagan was not immediately returned.
The identities of the lawyers representing the five men could not immediately be determined.
Daniel Bogden, U.S. attorney for Nevada, called prosecuting securities fraud a priority in the state.
He said a corporate fraud task force of state, local and federal law enforcement agencies including the FBI, the U.S. Attorney's Office, the IRS and the U.S. Postal Service has been investigating false reporting of income, insider trading and securities fraud.
This story appeared in The Daily Herald on page C3. |
