Re: July 10, 1999, Marchiano freed on $1 million bail
By GINA EDWARDS, Staff Writer
NEW YORK - Indicted Naples brokerage firm owner Anthony Marchiano was released from a Brooklyn jail late Friday after satisfying prosecutors that the source of his $1 million bail wasn't tainted money.
He declined comment upon his 10:15 p.m. release.
A New York judge has frozen Marchiano's assets in the wake of his indictment on charges that his firm, A.S. Goldmen & Co., was the vehicle for a corrupt stock fraud enterprise that bilked thousands of investors out of nearly $100 million.
The Manhattan District Attorney's Office is seeking forfeiture of $99.2 million from Marchiano and other indicted brokers. The money would be used to repay defrauded investors, many of whom were elderly.
Marchiano would have to forfeit his assets if convicted on charges that he and members of his allegedly corrupt enterprise committed crimes in almost all facets of offering securities to the investing public.
Among the securities that prosecutors allege A.S. Goldmen manipulated were those involved in the failed Stadium Naples golf deal - Millennium Sports Management Inc. and Stadium Capital Inc.
Marchiano, 37; his twin brother, Salvatore, and Anthony Marchiano's wife, Maria, 30, each pleaded innocent to the various charges alleged in the indictments unsealed in Manhattan on Thursday.
Altogether, 33 individuals including 26 A.S. Goldmen employees were indicted as part of the ongoing criminal case.
Four of the indicted brokers worked in the Naples offices of A.S.
Goldmen, which went dormant in October but remains licensed to do business. Two other former Naples A.S. Goldmen brokers were indicted in November.
Salvatore Marchiano, of Freehold Township, N.J., was released on $750,000 bail Friday. Maria Marchiano was released Thursday.
Should Anthony Marchiano be convicted of stock crimes, legal experts say Florida's homestead protection act will make it difficult to seize his $3.5 million beachfront house in Port Royal.
The Homestead Act provides a powerful shield that makes Florida a haven for debtors, experts say.
Manhattan prosecutors say the Homestead Act was a motivator when Marchiano moved the headquarters of his brokerage firm from New York to Naples in 1996 to escape law enforcement.
Seizing the house is possible, said Jules Cohen, an Orlando-based attorney who is an expert in bankruptcy law and Florida's Homestead Act.
But a home seizure is rare and difficult in Florida, he said.
"They cannot reach his home unless they can trace some of the money that was wrongfully taken into the home," Cohen said. "They have to show it going from investors' pockets to his bank accounts to the home."
Tracing the money becomes difficult because of the way money gets shuffled in the course of doing business, he said.
But the Homestead exemption wouldn't protect Marchiano's luxury auto collection that, as of May, included five Ferraris and a Lamborghini. As of May, Marchiano had 25 vehicles registered in his name.
The value of those cars, based on conservative industry estimates, would top $1.7 million, according to a review by the Naples Daily News.
Marchiano's wife, Maria, owns a warehouse on Mercantile Avenue in East Naples, where investigators say a number of cars are kept. The collection includes a yellow 1994 Lamborghini Diablo valued at more than $150,000 and a 1972 red Ferrari convertible that dealers say could be worth upward of $300,000.
An order issued by a New York state court judge freezes all of Anthony Marchiano's and other brokers' assets, including all bank accounts.
Prosecutors sought the asset freeze to prevent disposal and hiding of assets before the case goes to trial and restitution could be carried out.
At Marchiano's court arraignment Thursday, Assistant District Attorney Kevin Suttlehan told the judge that Marchiano transferred $3 million to an offshore account in the Bahamas in October to protect the money.
Suttlehan told the judge that Marchiano personally profited by $30 million to $40 million from criminal activity.
Other Naples brokers whose assets were frozen were John Abey, brothers Christopher and John DelCioppo, and Vincent Lia.
At a July 15 hearing, the defendants will have an opportunity to petition the court for exemptions, such as money for living expenses and lawyers' fees.
Marchiano's attorney, Wilmer "Buddy" Parker, said he's confident that the Manhattan District Attorney's Office won't be able to prove the charges.
He said the case likely won't go to trial for more than a year.
"There's going to be a long road to this litigation," Parker said.
The most serious of the 10 indictments linked to A.S. Goldmen and unsealed Thursday is the enterprise corruption indictment, which charges 17 defendants and includes 240 counts.
An enterprise corruption conviction under New York's Organized Crime Control Act carries a prison sentence of between eight and 25 years.
The indictment says Marchiano's enterprise engaged in a pattern that included manipulating small company stocks to benefit the defendants and their favored customers, intentionally lying to investors and refusing to let customers sell shares. It accuses the enterprise of outright theft from investors, ignoring complaints and inducing customers to retract them, and also forging documents to prevent discovery of the crimes.
Prosecutors say Marchiano set up the firm in 1988 to commit crimes. He named the firm A.S. Goldmen for initials of Anthony and Salvatore, the men who make gold. The firm's slogan on marketing material was "Building trust as we build tomorrow."
Among the stocks A.S. Goldmen is accused of manipulating was Millennium Sports Management Inc., Bill Rasmussen's partner in the failed Stadium Naples golf development.
Prosecutors and the Securities and Exchange Commission, which filed a separate action against Marchiano and seven other A.S. Goldmen brokers Thursday, say A.S. Goldmen's Naples office was a boiler room. They say brokers lied to investors about the Stadium Naples deal and engaged in numerous fraudulent sales practices to hype the stock of Millennium and drive up its price.
Prosecutors say brokers neglected to say Rasmussen's earlier Stadium Naples deal fell through following public outrage over Collier County Commissioner John Norris' role as a limited partner. Norris, who denies wrongdoing, was to earn $7.5 million on the deal before it collapsed.
Last month, federal prosecutors, at the request of Gov. Jeb Bush, reopened a bribery investigation of Stadium Naples, a proposed tournament play course with grandstand spectator seating and luxury skyboxes.
State Attorney Joe D'Alessandro, who declined to press charges, bought stock in Stadium Naples partner Millennium during the course of his investigation into Norris and Stadium Naples founder Rasmussen.
D'Alessandro, who maintains the stock ownership posed no conflict, bought the stock from brokers at A.S. Goldmen. He told investigators from the Florida Department of Law Enforcement, who conducted a review for Bush, that he bought Millennium stock from John DelCioppo.
DelCioppo was among those indicted. The 28-year-old DelCioppo, of Naples, was charged with grand larceny and 12 counts of stock fraud.
Rasmussen, the chairman of Stadium Capital, severed ties with A.S. Goldmen in June after New York prosecutors ordered a raid that seized hundreds of boxes of documents from Marchiano and the firm.
Regulators and prosecutors have sought to attack fraud in the trading of small company stocks, which they say costs investors $6 billion a year.
So-called micro-cap fraud has become a money-making enterprise for Italian and Russian organized crime families, law enforcement authorities say.
Parker, Marchiano's attorney, has said that Marchiano and A.S. Goldmen were victims of mob extortionists who sold short the firm's house stocks and threatened to devastate A.S. Goldmen's finances. He has said emphatically that A.S. Goldmen principals have no ties to organized crime.
Three weeks ago, a dozen A.S. Goldmen alumni were snared in federal indictments with links to organized crime families. The indictments were for conduct after the brokers left A.S. Goldmen.
Manhattan District Attorney Robert Morgenthau said he hopes the Goldmen indictments will send a message.
"What you hope is the message will get out that if you do this kind of thing, you're going to get caught," he said.
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