Re: 4/20/00 - A.S. Goldmen: Broker linked to Naples firm pleads guilty to corruption
A.S. Goldmen: Broker linked to Naples firm pleads guilty to corruption
Thursday, April 20, 2000
By GINA EDWARDS, Staff Writer
Manhattan prosecutors have announced the first of what could be a number of guilty pleas involving defendants in the $100 million A.S. Goldmen & Co. stock fraud case.
The guilty plea Tuesday indicates further links between employees at Goldmen ? the defunct brokerage owned by indicted Naples millionaire Anthony Marchiano ? and the brokerage Meyers Pollock Robbins Inc., an out-of-business firm with ties to the Genovese and Bonanno organized crime families.
Michael Cilmi, of Brooklyn, pleaded guilty Monday to two counts of enterprise corruption for conducting criminal activities while working at each brokerage at separate times.
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Cilmi faces between eight and 25 years in prison on each count at sentencing, scheduled in June before Manhattan Judge Leslie Crocker Snyder.
A total of 36 defendants with ties to Goldmen, 11 of them employees of Goldmen's Naples office, have been charged in the New York case brought by Manhattan District Attorney Robert Morgenthau.
Prosecutors say Marchiano, who denies wrongdoing, ran a corrupt enterprise at A.S. Goldmen that bilked thousands of investors across the country out of nearly $100 million. Prosecutors have frozen assets of defendants to pay back cheated customers upon conviction.
Marchiano ran a boiler-room operation in Naples where brokers spent hours on the phone hyping stocks before the firm closed in late 1998. At various times, the defunct firm also had offices in New York and New Jersey. The alleged Goldmen criminal enterprise is accused of manipulating the stocks of 10 small companies, among them the defunct Stadium Naples golf arena.
Brokers are charged with numerous abuses that include manipulating share prices, lying to customers, refusing to sell shares, using bogus trading accounts, trading shares without customer permission to generate sales commissions, and concealing illegal conduct.
In his guilty plea, Cilmi admitted to those abuses while working as a manager of senior brokers in the Goldmen enterprise from 1992 to 1996.
The subsequent year, Cilmi worked at Meyers Pollock's office at 67 Wall St., the building where Goldmen at one time had an office.
Cilmi pleaded guilty to enterprise corruption for his role as a supervisor of the fraud at Meyers Pollock from August 1996 to June 1997.
The Manhattan district attorney says the Meyers Pollock criminal enterprise engaged in a coordinated fraud in which stock promoters bribed brokers to sell shares in their companies at inflated prices. The enterprise stole from customers and laundered money, prosecutors say.
A spokeswoman from Morgenthau's office, Barbara Thompson, said a number of defendants in the A.S. Goldmen case have reached plea agreements. Only two guilty pleas involving Goldmen brokers have been made public ? Cilmi's and former Naples broker Michael Lamarti.
Lamarti, who was indicted in 1998, has pleaded guilty to attempted enterprise corruption, a charge that carries a maximum sentence of four years. His sentencing is scheduled in May.
Thompson said there are a number of guilty pleas connected to the continuing Meyers Pollock investigation that have yet to be announced.
Regulators say A.S. Goldmen played a major role in the murky world of penny stocks where fraud costs investors an estimated $6 billion a year.
In recent years, prosecutors and regulators have coordinated attacks on organized crime's influence on Wall Street. But regulators say once they close down fraudulent firms, the rogue brokers scatter like cockroaches and set up shop anew.
While prosecutors haven't claimed that Goldmen brokers have mob ties, dozens of former A.S. Goldmen brokers have cycled in and out of mob-connected penny stock brokerages in the last decade, a computer records search by the Naples Daily News found.
And a dozen A.S. Goldmen alumni have been snared in federal mob-on-Wall Street indictments involving members of Italian and Russian organized crime families. One former A.S. Goldmen alumni pleaded guilty last year to running a stock scheme for the Gambino organized crime family after he left Goldmen.
The Daily News search found that at least 50 former A.S. Goldmen brokers have also worked at Meyers Pollock.
Last week, federal prosecutors in Manhattan brought securities fraud and commercial bribery charges against Meyers Pollock, the firm's former president and 11 stockbrokers.
A 1997 federal indictment linked Meyers Pollock with defendants that included "capos," or captains, in the Genovese and Bonanno organized crime families. Sixteen of the 20 defendants charged in the 1997 indictments pleaded guilty last year, and two others were convicted at trial.
The A.S. Goldmen case is expected to go to trial in the fall.
Last week, Snyder ordered Goldmen's chief financial officer, Stuart Winkler, to jail until he comes up with $1 million bail.
Winkler violated his bail agreement and failed to come up with collateral promised to a bail bondsman.
As of Wednesday, Winkler was still detained in a Manhattan jail.
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