Top republican fundraiser arrested in federal fraud sting
D’Amato the center of a string of lawsuits alleging wrongdoing
Published Friday, August, 16, 2002
by Ted Jackson
Eagle Building Technologies, whose former chairman Anthony D’Amato was indicted on federal securities charges Thursday, left its offices at this suburban Boca Raton building suddenly two months ago.
One night a couple of years ago Anthony D’Amato, former chairman of local building technology firm Eagle Building Technologies, was feting New York republican Gov. George Pataki at the top of the swank Boca Raton Resort & Club.
In front of an assembled crowd of Boca Raton’s republican elite, Gov. Pataki thanked his “good friend” D’Amato for throwing such a nice party for him and, more importantly, for raising money.
Thursday, Gov. Pataki’s “good friend” was indicted on federal securities fraud charges. D’Amato was charged as part of a massive federal undercover sting operation that focused on 58 South Florida securities scammers (see accompanying story).
Federal prosecutors allege D’Amato conspired to sell $4.2 million of Eagle Building Technologies stock to a phony FBI mutual fund at inflated prices. D’Amato, a large shareholder in Eagle Building, then allegedly “lent” $2 million of the stock sale proceeds to two conspirators, who then kickbacked $1 million to an undercover agent posing as a corrupt mutual fund official.
The federal charges are only the latest accusations of wrongdoing to be leveled at D’Amato, Eagle Building Technologies and its board of directors. The Securities and Exchange Commission filed a series of charges against the company earlier this year. The company and its directors are also the target of a number of individual lawsuits, some of which allege out-and-out theft.
“These are very bad people,” said one local businessman who has had extensive dealings with D’Amato and Eagle Building Technologies. “They don’t care who they hurt.” D’Amato and Eagle Building Technologies directors were not available for comment Thursday. Eagle Building left its offices in west suburban Boca Raton suddenly two months ago. The building manager said the company left no forwarding address.
Sitting on the Eagle Building Technologies board are big names like Meyer Berman, a top ten securities industry contributor to the Democratic Party, and Charles Gargano, vice chairman of the Port Authority of New York and New Jersey.
A former ambassador in the previous Bush administration and a top GOP fundraiser, Gargano was the subject of a two-year probe that centered on allegations of shady business dealings and bribery. He was never charged.
Berman, whose firm M.A. Berman Associates is based in Boca Raton, is a prominent securities trader who has guested on CNBC and has been featured in the Wall Street Journal and Barron’s.
Not only does Berman sit on Eagle Building Technologies’ board, he is currently acting as the company’s chairman and he is also chairman of BioSterile Technologies, a company that claims to be involved in meat irradiation technology.
In 2000, when D’Amato was throwing money at Gov. Pataki, he became very rich due to the fact that Eagle Building shares were trading at around $75, after reaching a high of over $100 the previous year. By the fall of 2001, Eagle Building stock was languishing at around $4.
That’s when, according to the Securities and Exchange Commission, Eagle Building Technologies cooked up an unscrupulous scheme to lift the company’s share price.
The SEC says that D’Amato, in an allegedly callous attempt to profit from the anthrax scare, started claiming that Eagle Building Technologies, in an affiliation with Berman’s BioSterile Technologies, had a device that could detect and kill any bacteria, including anthrax. Eagle Building further claimed, according to the SEC, that it would test the device in front of congressional leaders.
The trick worked. Eagle Building shares more than tripled to $12.50 by early this year. The stock then tumbled in February following news that the SEC was investigating Eagle Building.
Another suit, brought in Palm Beach County Court by former JM Family Enterprises top executive and Boca Raton entrepreneur Logan Pierson, alleges that D’Amato in essence stole his company, Boca Raton-based PolySolutions Corp.
The suit, filed in the spring, accuses D’Amato and the Eagle Building board of engineering a one-for-six “reverse stock split” - which had the effect of reducing the number Eagle Building shares outstanding by a factor of six - in order to cheat Pierson.
Since Pierson had been promised 200,000 shares of Eagle Building Technologies in consideration for PolySolutions, the reverse stock split meant that payment for PolySolutions was also reduced by a factor of six, to 33,000 shares.
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Copyright 2002 - Boca Raton News |
