United States Attorney
Southern District of Florida
99 N.E. 4 Street
Miami, FL 33132
(305) 961-9000
April 29, 2003
NEWS RELEASE:
FORMER CORPORATE OFFICER PLEADS GUILTY
TO SECURITIES FRAUD CHARGES
Marcos Daniel Jiménez, United States Attorney for the Southern District
of Florida, and Hector M. Pesquera, Special Agent in Charge, Federal Bureau
of Investigation (FBI), announced today that Anthony M. Damato pleaded
guilty before United States District Court Judge Jose E. Martinez to a
recently filed one-count Superseding Information charging Damato with
securities fraud in connection with a fraudulent scheme to falsify the
financial condition of Eagle Building Technologies, Inc. (EGBT), a Boca
Raton company for which Damato served as Chairman of the Board of Directors.
In pleading Damato admitted that from about June 2000 to February 2002
he falsified the company records and press releases of EGBT, the stock of
which is publicly traded. Specifically, Damato created fraudulent EGBT
bank accounts and purchase orders and diverted privately invested funds to
EGBT, in order to give the false appearance of substantial revenue coming to
EGBT from sales and operations in India. He then caused false statements to
be submitted to the U.S. Securities & Exchange Commission (SEC) to create
the erroneous appearance that revenue was being received by EGBT. Damato
also allowed an EGBT officer to issue misleading press releases regarding
the testing and capabilities of a surveillance system of Biosterile
Technology, Inc., a company represented by EGBT, in order to take advantage
of the publicity and fear generated by widely reported incidents of
terrorist activity involving anthrax in the United States. In addition,
Damato made payments in an attempt to bribe SEC employees in an effort to
avoid SEC scrutiny and to conceal and perpetuate his fraudulent activity.
He also made an undisclosed payment to an undercover FBI agent as a bribe
for due-diligence investment officers with whom the agent claimed to be
working, in order to get EGBT on a list of stocks purportedly approved by a
mutual fund that the undercover agent claimed to represent.
Damato was first indicted in the Southern District of Florida for his
involvement in connection with an FBI undercover operation, code-named
Bermuda Short, that resulted in 50 arrests and 23 indictments involving the
stock of over 20 publicly traded American companies, including EGBT. The
original indictment resulted from a long-term investigation conducted by the
FBI in which an undercover FBI agent posed as a corrupt securities trader
working at a U.S. investment firm for a foreign mutual fund, both of which
were fronts used for the undercover operation. The current Superseding
Information replaces the indictment, and includes additional criminal
activity.
The sentencing hearing for Damato has been scheduled for July 11, 2003,
before Judge Martinez. Damato faces a statutory maximum sentence of 10
years' imprisonment, a money penalty of up to $1,000,000, and mandatory
restitution.
Mr. Jiménez commended the investigative efforts of the FBI, as well as
the cooperative efforts of the U.S. Department of Justice, the SEC's Central
Regional Office, and the National Association of Securities Dealers, Inc.
(NASD). This case was prosecuted by Trial Attorneys Thomas P. McCann and
Jack B. Patrick of the Fraud Section, U.S. Department of Justice. |
