usatoday.com
Mob members indicted in stock scheme
89 people accused of stock scams, money laundering
By Tom Lowry, USA TODAY
NEW YORK - The bull market is so seductive it is uniting mob families, prosecutors say.
Three people identified by prosecutors as associates of the Italian Colombo and Russian Bor organized crime groups were among 89 people indicted Wednesday on charges they manipulated the stock prices of 20 companies through nine brokerages.
In three different schemes - one allegedly involving the mob - thousands of investors lost more than $100 million, federal prosecutors say.
The indictments underscore organized crime's growing influence on Wall Street, prosecutors say. "As law enforcement has begun to shut off many of the more traditional areas of criminality (trucking and garbage hauling) from exploitation by organized crime, both Italian and Russian crime families have begun to look at securities markets as a new 'growth industry,' " says Brooklyn U.S. Attorney Zachary Carter.
Most defendants are accused of telephoning investors unsolicited to hype shares of small companies with virtually no business. The defendants then sold their own interests in those companies once the share prices rose, leaving investors with worthless stocks, prosecutors say.
The charges against the defendants include stock fraud, mail fraud, racketeering and money laundering, which carries up to 20 years in prison. One of the laundering schemes: wiring proceeds to offshore accounts, then back onshore to accounts at Las Vegas casinos, where it was withdrawn as cash.
Dominick Dionisio and Enrico Locascio, both of Staten Island and identified by prosecutors as associates of the Colombo family, allegedly controlled branch offices of several brokerages. Prosecutors say the two used registered and unregistered brokers to inflate stock prices by having them make false statements to investors.
Yakov Slavin of Brooklyn, identified by prosecutors as an associate of the Bor crime group, joined Dionisio and Locascio in supervising the operation, prosecutors say.
Dionisio's lawyer, James LaRosa, could not be reached for comment. Locascio and Slavin remained at large Wednesday.
In a separate case, Robert Catoggio , Joseph DiBella and 53 others were charged with manipulating the share prices of 17 companies through four brokerages. Kickbacks were paid to brokers who helped inflate the stock prices, prosecutors say.
Catoggio and DiBella are serving prison sentences after pleading guilty in an earlier mob-on-Wall-Street case.
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