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usatoday.com
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Has Mob turned to securities fraud?
Indictments, guilty pleas point to 'new face
of organized crime'
By Greg Farrell
USA TODAY
NEW YORK -- Just what is it about the Mob and Wall Street?
Sure, that's where the money is. But there's money in other industries, like
banking. And yet, organized crime seems to have settled on Wall Street as
its next great growth opportunity, supplanting gambling, prostitution and
racketeering.
At a press conference last week announcing the indictment and arrests of
top members of the DeCavalcante crime family of New Jersey, U.S.
Attorney Mary Jo White accused the family of murder, as well as
loan-sharking and gambling, which she termed ''traditional strongholds of
organized crime.''
But White emphasized the DeCavalcante family's involvement in securities
fraud, describing it as ''the new face of organized crime.''
The evidence to back up White's claim:
* At a recent hearing in federal court in Tampa, Philip Abramo, an alleged
''capo'' in the DeCavalcante family, pleaded guilty to various charges of
securities fraud, mail fraud and wire fraud.
A DeCavalcante soldier, Louis ''Louie Eggs'' Consalvo, also pleaded guilty
in the Florida case, which involved the ''pump and dump'' of several
small-cap stocks.
Both men were included in last week's indictment in Manhattan.
* Last June, the FBI arrested 120 suspects, including men with ties to the
Colombo and Bonanno organized crime families, charging them with
securities fraud involving more than $50 million in ill-gotten gains.
The Mob's infiltration of various corners of the stock market has a long
and storied history, says Ron Goldstock, former director of the New York
State Organized Crime Task Force.
''The Mob has been on Wall Street for 40 to 50 years,'' he says, going
back to instances of penny-stock scams in the 1960s.
Mob interest in Wall Street makes sense for several reasons, Goldstock
says.
First, and most obvious, is the amount of money that changes hands.
Beyond that, the diversified nature of organized crime syndicates can lead
to new business opportunities. ''Organized crime tends to have a variety of
victims,'' Goldstock says.
''Let's say you've got a loan shark victim who can't pay, but he's a
dispatcher for a trucking company. He might be able to let the Mob know
which trucks are carrying valuable freight.''
The same thinking applies to the securities markets.
''It's clear that a lot of people on Wall Street are gamblers,'' Goldstock
says.
''So you can see how a broker who was in trouble might be
compromised.''
In the Florida case, Abramo and Consalvo, among others, were accused
of artificially pumping up the price of stock of several small companies by
hyping their growth prospects, then dumping their own shares for a big
profit.
Abramo and Consalvo were also accused in the indictment of occasionally
using the threat of violence to get brokers to aggressively sell the stock and
promoters to advertise it.
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