U.S. Judge Jails Ex-Broker Who Helped Authorities, Then Author
May 30 (Bloomberg) -- A former stockbroker who helped
authorities investigate organized crime on Wall Street was jailed
after prosecutors said his life was in danger because he is
featured in a new book about stock fraud.
Louis Pasciuto worked at ``chop shops'' that sell small
company stocks at inflated prices to investors. Pasciuto pleaded
guilty in 1999 to stock fraud and was free on bail. As authorities
probed dozens of small brokerages, Pasciuto secretly taped
conversations with reputed members of organized crime.
His undercover work led to at least 20 arrests, his lawyer
said. Authorities didn't know he was also talking to Business Week
writer Gary Weiss. In April, after the FBI learned that Weiss had
turned the interviews into a book, Manhattan prosecutors said
Pasciuto was at risk and moved to jail him.
U.S. District Judge Richard Casey today revoked Pasciuto's
bail, turning aside lawyer Robert Baum's claim that prosecutors
cited safety as a ``pretext'' for their anger. ``What's prompted
the government's motion is the publicity surrounding the book,''
Baum told Casey. ``The book came out, and suddenly he's got a safety issue.''
Weiss, author of ``Born to Steal: When the Mafia Hit Wall
Street,'' said prosecutors wanted to ``punish Pasciuto for talking
to me.'' The Authors Guild has called the government's move a
``serious threat to First Amendment freedoms.''
`Hornet's Nest'
Prosecutors deny having an improper motive and say they fear
Pasciuto ``stirred up a potential hornet's nest of interest.''
He's ``at risk of harm from friends and associates of the people
against whom he had cooperated,'' Assistant U.S. Attorney David
Esseks said in court papers.
Prosecutors had planned to seek Pasciuto's jailing earlier
this month. They relented after reaching a deal with the Staten
Island, New York, man that would have sent him to the witness
protection program. After Pasciuto learned the details of the
program, he backed out of the deal, and prosecutors asked Casey to
imprison him.
Pasciuto will be sentenced on Aug. 29. He faces up to 10
years in prison, although Baum will seek a lesser sentence because of his cooperation.
Business Week is owned by The McGraw-Hill Companies Inc., a
New York-based media and publishing company.
--David Glovin in U.S. District Court in New York (1) (212) 732-
9245, or at dglovin@bloomberg.net, through the New York newsroom
(212) 732-9245. Editor: Rubin. |
