Two convicted in 'Mob on Wall Street' probe
By Gail Appleson, Law Correspondent
NEW YORK (Reuters) - A principal of a New York brokerage who had ties to the Luchese Crime Family was convicted along with a Chicago futures trader Wednesday of racketeering in a case stemming from the government's probe of mob infiltration of Wall Street.
John Black, a principal of Grady & Hatch and an associate of the Luchese Crime Family, and Glenn Laken, a Chicago Futures trader, were convicted by a Manhattan federal jury of racketeering conspiracy, bribery and fraud charges for their role in a scheme to pay illegal kickbacks to labor union officials so they would place union pension fund assets in fraudulent investments.
Three other defendants were acquitted after the three-month long trial.
The men were among 120 people arrested in June 2000 after a long-running undercover investigation that included court-authorized eavesdropping in the office of DMN Capital Inc., described by prosecutors as a mob-controlled investment bank, in lower Manhattan.
Prosecutors said this was the largest number of people ever arrested at one time on securities fraud related charges and one of the largest number ever arrested on a criminal case of any kind.
Defendants had been arrested in New York, Connecticut, Pennsylvania, Maryland, Virginia, Georgia, Florida, Texas, Illinois, Utah and California. The defendants, who included mob figures, officers of the Ranch-1 fast food chain and a retired police detective, were charged in cases that alleged sprawling nationwide fraud schemes that caused losses of more than $50 million.
SECRET KICKBACKS
To date, 92 defendants have been convicted in the investigation.
Black and Lake each face a maximum sentence of 20 years in prison on the racketeering charge; five years on a conspiracy charge, five years on each of three wire fraud charges and three years on each of the illegal kickbacks to union officials charges, plus criminal fines and forfeiture.
The evidence at trial showed that Black worked with the principals of DMN Capital in devising the fraudulent investments, planning the illegal pay-offs to corrupt union officials and recruiting co-conspirators to the plan.
The evidence against Laken showed that he was the principal of TradeVentureFund, a hedge fund that was one of the fraudulent investment deals.
Laken agreed to pay secret kickbacks to the principals of DMN Capital to raise money for the TradeVentureFund on the understanding that these kickbacks would be used to pay off corrupt union officials to induce them to switch pension fund money to a corrupt investment adviser.
A number of defendants charged in the scheme with Black and Laken have previously pleaded guilty. They include Robert Lino, a captain in the Bonanno Crime family, who is serving an 83-month prison term; James Labate, an associate of the Gambino Crime Famly and a former DMN Capital principal, who is serving an 87-month term; and Frank Persico, an associate of the Colombo Crime Family and a former trustee of the Production Workers Local 400 Pension Fund, now serving a 63-month prison term.
19:41 02-13-02 |
