Perhaps this Russian Mob story is related?
Paper: Houston Chronicle
Date: FRI 03/03/00
Section: BUSINESS
Page: 3
Edition: 3 STAR
U.S., Russian mobsters accused of pulling stock scam
Associated Press
NEW YORK - Russian mobsters teamed up with four Italian organized crime families in New York to infiltrate Wall Street in a stock scam that could have earned them more than $60 million, authorities said Thursday.
The unusual combination of forces funneled millions of dollars in illicit proceeds from stock sales through offshore banks before the FBI stumbled upon documents in a storage locker that revealed the large-scale stock fraud and money-laundering plot, investigators said.
A four-year probe culminated in an indictment unveiled Thursday in Brooklyn. In all, 19 people were charged, including six alleged mobsters or associates of crime families, all of them accused of participating in the scheme between 1993 and 1996.
Some of those charged had been captured earlier in a similar prosecution in U.S. District Court in Manhattan. That case involved stock manipulation by small brokerage houses protected by the mob.
U.S. Attorney Loretta E. Lynch said the case "illustrates the continuing relationship of organized crime in the stock market."
The mob, she said, "sought to extend its reach into the lives of ordinary citizens."
She estimated the mobsters reaped at least $40 million in illegal profits, while Lewis Schiliro, the FBI's assistant director in charge of the New York office, said profits easily could exceed $60 million.
He said the case proved once again that organized crime families, closed off from traditional avenues of income through aggressive prosecutions, sought new opportunities elsewhere.
"A recurrent theme in our investigations has been that the mob goes where the money is," he said.
Among those indicted in the case were a captain in the Bonanno crime family, a soldier in the Genovese family, an associate in the Colombo family and an associate and a soldier in the Gambino family.
The Russian gangsters used their expertise in money-laundering and offshore bank accounts while the New York mob families lent their skills at muscling their way to money through threats and intimidation, Schiliro said.
Authorities refused to divulge exactly how the organized crime families protected the scheme or if anyone was injured.
Schiliro said help from the mob was welcomed by two now-defunct brokerage firms in downtown Manhattan - White Rock Partners & Co. and State Street Capital Markets Corp.
According to the indictment, top executives at the two companies joined other brokerage firms and brokers to create fraudulent securities schemes and then launder tens of millions of dollars of illicit profits.
The firms allegedly acquired control of tiny companies by quietly buying enough stock in them, then artificially boosted their value by paying unscrupulous brokers to persuade unwitting investors that they should buy stock in the same companies.
After the stock value rose six or seven points, the firms cashed in by selling their secretly held shares, causing the value of the stocks to plummet, the indictment alleged.
The profits allegedly were laundered through offshore bank accounts. |
