Re: 2/21/00 - Unsealed documents show flurry of legal arguments in Marchiano trial
Unsealed documents show flurry of legal arguments in Marchiano trial
Monday, February 21, 2000
By GINA EDWARDS, Staff Writer
The stockbroker gunned down gangland-style in New Jersey and speculation about Naples millionaire Anthony Marchiano's mob ties.
The Smith & Wesson .357 handgun Marchiano kept under his mattress at his Gordon Drive mansion and the handgun he carried in a briefcase.
The sophisticated taping machine in the master bathroom that authorities say Marchiano used to record phone calls with his stockbroker employees and conversations between his mother and twin brother.
The law enforcement officers in ski masks and full SWAT gear who drew their guns and frisked Marchiano at his home during an April 1998 raid.
All are fodder for legal arguments flying between prosecutors and defense attorneys in hundreds of pages of court documents recently unsealed in the A.S. Goldmen & Co. stock fraud case playing out in a Manhattan court.
Marchiano, owner of the defunct Naples brokerage A.S. Goldmen & Co., is charged with running a corrupt enterprise that prosecutors say cheated investors out of $100 million in numerous penny stock swindles.
Anthony Marchiano
The case, which includes 33 defendants with A.S. Goldmen ties who were indicted in July, is expected to go to trial this fall in Manhattan. Two Naples brokers were indicted in November 1998 and one has pleaded guilty.
Prosecutors and federal regulators say Marchiano ran a boiler room operation in Naples where stockbrokers made hundreds of phone calls to investors daily while fraudulently pitching stock in Stadium Naples - a twice-failed golf arena development that's also the subject of a separate federal bribery probe involving a Collier County commissioner.
Prosecutors charge that A.S. Goldmen manipulated small company stocks through so-called pump and dump manipulation schemes.
In some cases, the scheme worked like this, prosecutors say: The firm acquired large blocks of cheap stock in initial public offerings. Goldmen's high-pressure brokers would hawk the stock using false and exalted claims to investors to create demand for the stock and pump up prices. When the price was driven high enough, Goldmen insiders and their friends would dump the shares, selling at large profits. Meanwhile the dump created an unstoppable price slide and wiped out investors.
A.S. Goldmen defense attorneys have asked the court in motions to throw out evidence gathered in the April 10, 1998 search of Marchiano's Gordon Drive mansion, and the Goldmen brokerage offices in Naples and Iselin, N.J.
Marchiano's attorney, Buddy Parker, called the search an unconstitutional "fishing expedition" by law enforcement officers in court papers.
Assistant Manhattan District Attorney Kevin Suttlehan counters in court papers that the sweeping nature of the alleged stock crimes - which spanned six years and percolated through all facets of the brokerage's day-to-day operations - warranted a sweeping search for evidence.
Court papers referencing the evidence - thousands of pages of documents, audio tapes, video tapes, surveillance photos, and computer records - show the complexity of the case.
In October, Judge Leslie Crocker Snyder ordered court papers sealed and reprimanded Marchiano attorney Parker for fingering a potential informant - and possibly jeopardizing the informant's safety - in court documents.
Crocker lifted the sealing order, which kept documents out of the public view until their review by the court, earlier this month at the urging of defense attorneys.
Claims of mob ties
Defense attorneys claim in court papers that the judge's sealing order, in effect, gagged them from counteracting publicity linking brokers found executed in a Colts Neck, N.J. mansion to A.S. Goldmen & Co.
George Arnett, attorney for A.S. Goldmen officer Stuart Winkler, said prosecutors told defense attorneys that the two dead men - one a former Goldmen employee - did not assist prosecutors in the A.S. Goldmen case despite press reports citing unnamed law enforcement sources declaring the opposite.
Arnett further states that slain stock promoter Al Chalem didn't work at A.S. Goldmen. But records from the National Association of Securities Dealers list Chalem as an employee of A.S. Goldmen from January 1994 to December 1995.
Assistant District Attorney Suttlehan counters in court papers that his office gave defense attorneys papers showing that Chalem had prepared to register as a broker at Goldmen and his application bore Winkler's signature.
Arnett states that prosecutors, in a May meeting before the July indictments came down, told Goldmen defense attorneys that the case was a securities case, but that one or more defendants might have "tenuous associations" with organized crime figures.
Arnett complains that prosecutors have let press publicity about "mob overtones" go unchecked.
But prosecutor Suttlehan noted that Marchiano and other defendants have been charged with enterprise corruption under New York's Organized Crime and Control Act. The only "mob overtones" - in the sense of traditional families - have come from Marchiano's attorney Parker in statements to the Naples Daily News, Suttlehan said in court papers.
Parker told the Naples Daily News in June that Marchiano is a victim of mob short-selling meant to collapse A.S. Goldmen house stocks. The statement came in June when a Naples Daily News reporter questioned Parker about a dozen former Goldmen brokers named in separate federal mob-on-Wall Street indictments. One former Goldmen broker, who has now pleaded guilty, was named as a ringleader for a Gambino family stock scheme conducted after he left Goldmen.
"Ultimately, the real question is not whether there is a 'mob' connection but rather a perception of a connection. And that perception derives entirely from the conduct of Mr. Marchiano and his lawyer, who chose to send a 'we know where you live' message to possible informants," prosecutors say in court documents.
Suttlehan said defense attorneys have gratuitously used legal papers to publicize their case and attempt to intimidate potential witnesses.
Search and Seizure
Parker, Marchiano's attorney, argues in court papers that law enforcement officers mistreated Marchiano and his family during the search of his beachfront mansion at 3630 Gordon Drive.
Dressed in black, wearing ski masks and outfitted in SWAT gear, law enforcement officers pushed Marchiano to the floor, stepped on him and put a gun to his head before pushing him to the wall and frisking him, Parker claims in court papers.
Marchiano's wife, Maria, who has also been indicted, and Marchiano's then 8-year-old son were grabbed at gunpoint during the search, Parker states in court papers.
Prosecutors counter that such actions were justified, within the law, and meant to protect both law enforcement officers and the Marchianos so the search could be executed.
"The most disingenuous claim is that the execution of the search warrant endangered Marchiano's son," prosecutors say. "The Marchiano family makes this claim despite keeping handguns laying around the house, including under the paternal mattress."
Law enforcement officers seized the .357 Smith & Wesson handgun under the mattress and another handgun found in a briefcase on a bedroom table and later returned them. The guns were seized although they weren't in the scope of the warrants and no probable cause existed that any violent crimes occurred, Parker claims.
Parker asserts that law enforcement officers improperly seized other items like video and audio cassette tapes from the Marchiano home that had nothing to do with Goldmen business.
But prosecutors contend police seized audiocassette tapes that the Marchianos used to record conversations with their own brokers on a sophisticated taping machine hidden in the master bathroom of their home.
The machine was capable of automatically recording all incoming and outgoing calls to the home, including between Marchiano's mother and brother Salvatore regarding A.S. Goldmen related business, prosecutors say.
In an attack on hearsay evidence used to justify the search warrants, Parker reveals in court documents that Stadium Naples founder Bill Rasmussen spoke to prosecutors in January 1998 - three months before the raid and subsequent collapse of the golf stadium deal.
The search warrant application papers have not been publicly released so circumstances surrounding any discussions between Rasmussen and prosecutors before the April raid aren't clear.
Goldmen defense attorneys have asked prosecutors to return thousands of pages of material. But prosecutors contend there's no point in returning documents to a defunct business.
Prosecutors say another reason not to give back documents: The grand jury has extended its term to hear evidence regarding others who may be indicted as part of the continuing investigation.
Winkler, Marchiano and the corporation have been indicted for destroying documents and suborning perjury.
Prosecutors quote in the documents Winkler's tape-recorded statements in which he says he has "a track record" of hiring the best lawyers in the country to get his way, partly through drawn out court battles.
"I go after the people and that's it, and they, and they have to fold up because the person who has the best lawyers and the most amount of money always wins against the people who have lesser lawyers and lesser amounts of money."
Copyright ¸ 2000 Naples Daily News. All rights reserved.
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