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Pace Gets 100 Months in Prison, Must Pay $134.9 Mln (Update1)
2002-04-26 12:38 (New York)
Pace Gets 100 Months in Prison, Must Pay $134.9 Mln (Update1)
(Adds details of plea, beginning in sixth paragraph.)
New York, April 26 (Bloomberg) -- Randolph Pace, who secretly
controlled the now-defunct Sterling Foster & Co. brokerage, was
sentenced to eight years, four months in prison for duping
thousands of investors out of more than $130 million.
Pace, 56, was jailed immediately by U.S. District Judge
Loretta Preska in New York. Clearly surprised by the sentence,
Pace hunched his shoulders, put his hands over his eyes and shook
his head back and forth as marshals ordered him to remove his
belt, watch and tie. He was also ordered to pay $134.9 million in
restitution.
Sterling Foster, which once had 275 brokers, closed in 1997
after authorities raided it. Prosecutors said the Melville, New
York-based firm swindled investors by manipulating the price of
stocks that the firm underwrote and sold. Pace pleaded guilty in
2000 to 13 counts of conspiracy and securities fraud.
``There was nothing subtle or nuanced about Mr. Pace's
schemes,'' Preska said today. ``He is a thief.''
Prosecutors said Pace and other Sterling Foster executives,
including two other men who also had secret control of the
brokerage, operated a boiler room that used deceptive sales
practices and market manipulation schemes from 1994 to 1997. Those
men, Warren Schreiber and Alan Novich, have also pleaded guilty.
At least 6,000 customers who invested in Advanced Voice
Technologies Inc., Com/Tech Communication Technologies Inc.,
Applewoods Inc. and other companies underwritten by Sterling
Foster lost millions of dollars, authorities said.
Millions in Assets
Pace faced up to nine years behind bars. His lawyer, citing
the emotional turmoil Pace has suffered, asked for a sentence of
about seven years. Attorney Robert Morvillo denied that Pace had
rigged initial public offerings.
``We have not conceded the fact that Mr. Pace was involved in
stock manipulation,'' Morvillo told Preska.
The judge disagreed and said Pace had shown no regard for his
victims. According to Preska, Pace once said of investors who
complained about worthless stock they'd bought, ``I don't care if
they die with that.''
Assistant U.S. Attorney George Canellos told the judge that
Pace had at least $4.5 million in assets and asked that he be
ordered to surrender the money immediately. Preska will rule on
that request in coming weeks. Canellos also said that Pace's wife
had ``many, many, many millions.''
--David Glovin in U.S. District Court in New York (212) 732-9245,
or at dglovin@bloomberg.net, through the Washington newsroom (202)
624-1937. Editor: Allen. |
