FED PROBE INTO LANCER TIES ASKED By CHRISTOPHER BYRON
September 26, 2003 -- Connecticut officials yesterday called for a federal probe of business ties linking organized crime figure Abraham Salaman figure to the loss of more than $19 million in Connecticut State Pension Fund money via investments in penny stocks controlled by the Lancer hedge funds.
In Miami, meanwhile, a closely watched bribery and kickback trial has begun in which the Lancer fund's second-in-command, Bruce D. Cowen, is expected to testify as a key government witness to charges that he and two others conspired to bribe a federal undercover agent using shares of a Lancer controlled penny stock.
Cowen's arrest in July 2002 as part of an FBI sting dubbed Operation Bermuda Short triggered a series of expose articles by The Post.
The Lancer hedge fund group, which claimed $1 billion of assets under management at the start of this year, sued the Post for libel over its series.
But the suit was dropped after the Securities and Exchange Commission investigated the fund's investment practices and shut the funds down in July, charging that the group's managing director, Michael Lauer, had grossly overstated Lancer's assets and performance to lure in unsuspecting investors.
Meanwhile, sources in the case say that the federal investigation that began with the Operation Bermuda Short probe has now broadened out to include Lancer-related activities in Dallas, Los Angeles and the tax haven island nation of Tortola.
In addition, more than a dozen civil lawsuits have been filed by investors seeking to recover their money from the fund. The government-appointed receiver in the case filed a report earlier this month saying that the fund's books are in such disarray that it has so far been impossible to establish what portfolio assets the fund actually owns.
Now, Connecticut Treasurer Denise Napier has joined the fray, formally requesting both the Securities and Exchange Commission and the U.S. Department of Justice to investigate whether a Windsor, Conn., investment firm called Pioneer Ventures Associates may be involved in Lancer-related activity.
The Pioneer firm first surfaced in a Connecticut state scandal in 1999 when the company invested some $24.7 million of Connecticut State Pension money in three apparently worthless penny stocks.
Last month, The Post reported the companies - Fidelity First Financial, American Interactive Media and NeuroCorp International - were all controlled by Lancer along with Abe Salaman, a twice-convicted federal securities law felon.
The Post further reported that Pioneer had direct ties of its own to Salaman and that Pioneer's managing director, John Ferraro, was a member of the board of directors of Fidelity First Financial until May of this year, when he resigned. |
