dailynews.yahoo.com
Tuesday August 1 6:56 PM ET
Financier Robert Brennan Arrested
By JEFFREY GOLD, Associated Press Writer
FREEHOLD, N.J. (AP) - Disgraced financier Robert E. Brennan, who
appeared in TV commercials urging investors to buy penny stocks before
regulators labeled him a cheat, was arrested Tuesday and charged with
bankruptcy fraud.
Two indictments were unsealed with Brennan's arrest, both relating to his
cashing of $500,000 in casino chips five years ago.
These are the first criminal charges Brennan has faced in a career marked by
frequent clashes with securities regulators. He was arrested at his Colts Neck
home.
State prosecutors had claimed this year in a civil proceeding that Brennan
attempted to hide a half-million dollars he got from cashing chips at the Mirage
casino in Las Vegas.
The state suggested Brennan, 56, was improperly shielding assets to keep them from being used to pay off the $45
million he agreed to pay to aggrieved investors. Brennan responded that the matter had been ``examined in
minutia'' four years ago and was only raised ``to smear and embarrass me.''
The five-count state indictment includes charges that Brennan failed to declare the money, and a six-count federal
indictment charges him with making false statements in a bankruptcy proceeding.
``We're going to defend this case,'' Brennan said. ``I don't intend to go anywhere.''
He is to enter a plea on the federal charges Thursday, and to the state charges on Sept. 11. His lawyer, Michael
Critchley, said he would plead innocent.
Brennan appeared in state Superior Court, where the judge set bail at $250,000. Brennan posted bail and was
immediately taken into federal custody.
Brennan appeared later before a U.S. magistrate in Newark, who released him under house arrest and gave him
two days to post a $500,000 bond.
Brennan became nationally known in the 1980s through television commercials for his First Jersey Securities Inc.
in which he stepped from a helicopter and told investors to ``come grow with us.''
He declared bankruptcy in 1995, when a federal judge in New York ruled that he cheated First Jersey investors
and ordered him to pay what is now more than $78 million to the Securities and Exchange Commission.
The SEC charged Brennan employed ``boiler room'' tactics at First Jersey and manipulated the market in low-cost,
high-risk shares of little-known companies - the so-called ``penny stocks'' - to fleece people who were pursued by
a high-pressure sales force.
Brennan also settled a lawsuit brought by New Jersey by agreeing to pay $45 million to investors. That suit said
that after closing First Jersey in the late 1980s, Brennan secretly controlled two other brokerages to run similar
penny stock scams.
But the SEC and New Jersey authorities say Brennan has consistently sought to hide his assets overseas.
The state indictment could carry a penalty of up to 10 years in prison. Each of the six federal charges carries a
penalty of up to five years in prison.
KJC |
