10 charged in stock scam
--------------------
BY PETE BOWLES
Staff Writer
April 28, 2004, 5:15 PM EDT
Ten stock brokers have been charged with operating a Manhattan securities firm as a racketeering enterprise by bilking hundreds of customers out of millions of dollars, authorities announced Wednesday.
The brokers, who worked for the now-defunct LCP Capital Corp., were allegedly paid bribes by stock promoters to fraudulently pump up the prices of 14 different stocks.
Manhattan District Attorney Robert Morgenthau said the exact losses suffered by investors are not yet known but that more than $50 million worth of stocks were sold in the scheme.
The 10, charged with enterprise corruption and grand larceny, were arrested Tuesday. Nine pleaded innocent at their arraignments in State Supreme Court in Manhattan and were released on bail ranging from $75,000 to $200,000 each.
The 10th defendant is in custody in New Jersey and faces extradition to New York. Each faces up to 25 years in prison if convicted.
According to the indictment, promoters paid the firm bribes of $11.8 million by check and wire transfers plus millions of dollars more in cash. The brokers often collected monthly bribes of more than $10,000 each, it was charged.
During the alleged scheme, from December 1998, through January 2001, the defendants enduced customers to buy stocks by using high pressure sales tactics, by making fraudulent purchase recommendations and by intentionally misrepresenting and concealing their true motivations for recommending the stocks, Morgenthau said.
He said LCP ceased operations while being investigated by his office and the Securities and Exchange Commission.
Charged were Kevin Brody, 45; Gerard Cerullo, 33; Dean Giasi, 33; Leonard Inserra, 31; and John Monteforte, 37, all of Staten Island; Nicholas Cutrone, 35, and Emanuele Scarso, 31, both of Brooklyn; Harold Donnerstag, 31, of Eatontown, N.J., and Joseph Pacillo, 36, of Parsippany.
Copyright (c) 2004, Newsday, Inc. |
