From the WSJ:
June 14, 2000
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Federal Authorities Charge 120 People
In Mob-Related Securities Fraud Case
A WSJ.COM News Roundup
NEW YORK -- Federal prosecutors on Wednesday charged 120 people, including members of all five New York City organized crime families, in one of the biggest securities-fraud cases in U.S. history.
The racketeering indictment handed up by federal grand jury in New York is the latest in a series of cases in which authorities are targeting organized-crime influence at small brokerages and in the market for small securities.
The far-reaching fraud stretched over five years and involved a horde of organized-crime figures, brokers, promoters and company officials, using traditional "boiler-room" tactics as well as the Internet.
The participants allegedly engaged in racketeering, using bribery, extortion and even soliciting murder to further frauds that reaped more than $50 million in illegal profits.
Authorities allege that mob figures infiltrated a number of brokerages in the scheme. Prosecutors said they obtained some of their evidence by bugging one firm, DMN Capital, which couldn't immediately be located.
U.S. Attorney Mary Jo White said never before have so many people been charged at once in such a case. Search warrants were executed at four locations in New York, one in Dallas and one in Salt Lake City, Utah.
As part of the scheme, members and associates of the Bonanno and Colombo organized crime families allegedly forged alliances with members and associates of the remaining three New York crime families.
They then sought to control and infiltrate broker dealers to defraud union pension plans, using traditional "boiler-room" operations and Internet techniques to carry out their crimes, prosecutors said in a statement.
When those techniques failed, they resorted to threats, extortion, physical intimidation and the solicitation of murder to further their goals, they said.
The criminal enterprise allegedly tried to manipulate eight publicly traded securities and to defraud investors in connection with three private placements of securities, including one by Ranch 1 Inc., a company that operates fast food restaurants in the New York City area and elsewhere.
As part of the overall scheme, the Internet was sometimes used to promote stocks and companies were falsely touted as Internet or "dot.com" companies to induce investors to capitalize on the Internet boom, prosecutors said.
In recent years, members of organized crime families have surfaced more frequently in securities fraud investigations.
Authorities have said mobsters have tried to infiltrate Wall Street because they have been forced out of many of their more traditional rackets and because dramatic rises in the value of stocks has convinced them there is easy money to be made.
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