Custable sentenced to 22 years in prison for stock scheme
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June 9, 2009
BY TESS FARDON AND NATASHA KORECKI Staff Reporter
A suburban businessman who a judge said “masterminded” a more than $3.5 million fraudulent stock scheme was sentenced today to almost 22 years in prison.
Frank Custable, the former president of Suburban Capital Corporation and North Coast Investments, Inc., was handed the stiff sentence this afternoon despite his cooperation with the government.
Custable, 44, of Bartlett, pleaded guilty last year to 20 counts of securities fraud totaling an excess of $3.5 million. He admitted to a scheme involving buying off stock from companies that were on the brink of collapse.
He then turned around and, working with others, sent out mass emails to entice investors in those same stocks, falsely stating that the companies were successful, Assistant U.S. Attorney John Podliska said. Podliska called it a “pump and dump” scheme in which Custable then sold the stocks by having a New York University student send spam e-mails about these collapsing companies being the next big thing.
Podliska said Custable had a “callous disregard” for the companies and stock buyers. Podliska said there were more than 250 victims of the scheme.
U.S. District Judge Blanche Manning sentenced Custable to the low-end of a sentencing guideline range, taking Custable’s “substantial cooperation” into consideration. Custable testified in the trial of a codefendant, who was acquitted.
Custable’s attorney, Jeffrey Steinback, asked for leniency based on his client’s cooperation.
“There are many good things that Mr. Custable has undertaken in his life,” Steinback said.
But Manning said she couldn’t be any more lenient than the 21 years and 10 months she gave Custable.
“It is one thing to know how to commit a crime, and quite another to actually do it,” Manning said. She later added: “I simply could not ignore his role and the fact that he masterminded this entire scheme.” |
