Broker gets 15 years in $15M fraud
BY ROBERT E. KESSLER
Newsday Staff Writer
December 12, 2006
A man who was one of the heads of the Staten Island office of a former Mineola brokerage firm has been sentenced to 15 years in prison and ordered to pay $14.5 million in restitution for defrauding 500 people out of $15 million, officials said.
William Brown, 67, of Staten Island, was sentenced Friday in Brooklyn by U.S. District Judge Nicholas Garufis after his conviction on charges of securities fraud, money laundering and conspiracy to commit securities fraud and money laundering.
Brown's attorney did not return calls for comment. Assistant U.S. Attorney Michael Asaro declined to comment yesterday.
Officials said Brown, working out of the Staten Island office of then Mineola-based Delta Asset Management, operated a scheme from 2000 to 2003 to sell inexpensive stock at vastly inflated values to clients, many of whom suffered severe economic hardship. One victim, in his 80s, lost half his life savings; another lost the money he'd saved for his children's college tuition, according to court records.
Delta was headquartered at 300 Old Country Rd., Mineola; the Staten Island branch was at 100 St. Mary's Ave.
"Boiler room" workers at the Staten Island location used high-pressure sales pitches to sell the stock, not informing clients that the brokerage would keep up to 50 percent of the purchase price as commissions, according to court papers. NASD rules allow brokers to keep 5 percent of sales as commissions.
Prosecutors noted that Brown previously had been running the same type of scam at a different Staten Island brokerage but closed it down after a government investigation began into that operation.
"Brown made a living for over six years by committing fraud on a daily basis," Asaro wrote in court papers. "In the process, Brown reaped millions of dollars in ill-gotten gains by pushing countless worthless securities on unsuspecting investors." |
