To: Frank_Ching who wrote (7517 ) 4/25/2000 3:39:00 PM From: Sir Auric Goldfinger Read Replies (3) | Respond to of 10354
Meyers Pollock Stole $176 Mln, Prosecutors Allege New York, April 25 (Bloomberg) -- A defunct New York brokerage and 20 others, including the firm's president, were indicted today on charges of cheating thousands of investors out of more than $176 million by selling stock in ``valueless'' companies, including one that owned three pizzerias in Poland. Manhattan District Attorney Robert Morgenthau accused the Meyers Pollock Robbins Inc. securities firm and its president, Michael Ploshnick, of running a five-year scheme to artificially inflate the price of almost two dozen companies. A Manhattan grand jury also charged 19 former principals of Meyers Pollock franchises and brokers who worked at satellite offices in Las Vegas, Ft. Lauderdale and Boca Raton, Florida, and on Long Island with participating in the fraud. Another 22 people connected to Meyers Pollock were charged previously and have already pleaded guilty, Morgenthau said. In all, more than 16,000 investors were victimized, many of them elderly, Morgenthau said. ``A woman who lived in a nursing home lost more than $100,000 when Meyers Pollock brokers conducted a number of unauthorized trades,'' he said. ``She lost 95 percent of her assets.'' And a 74-year-old retired pressman from Illinois was forced to sell property and then take a job bagging groceries to help pay for unauthorized margin trades, prosecutors said. ``There were victims all over the country,'' Morgenthau said. Today's indictment comes less than two weeks after a federal grand jury charged Meyers Pollock, Ploshnick, and 11 brokers with fraud for pumping up the price of worthless stock. Several of the brokers had earlier been charged in unrelated cases involving other allegedly corrupt brokerages, where they had also worked. Meyers Pollock, which had headquarters in New York, closed in December 1997, after regulators began probing the firm. Bribes to Brokers Manhattan prosecutors allege that four stock promoters, two of whom have already pleaded guilty, paid bribes to Meyers Pollock brokers who sold shares in 22 tiny companies. One of them was QPQ Corp., which owned three pizza parlors in Krakow, Poland, Morgenthau said. Brokers would typically convince customers to open accounts, at first recommending established stocks and later switching to highly speculative companies, Morgenthau said. ``Brokers falsely assured customers that the price of these stocks would rise quickly,'' Morgenthau said. As share prices rose, the stock promoters and brokerage principals would sell their own holdings, realizing fast profits while investors suffered large losses, prosecutors said. ``They'd run up the stock and sell out their own nominee accounts,'' Morgenthau said. ``The investors, the general public, would lose.'' Prosecutors also allege that the defendants used offshore accounts to launder their illicit profits. Two men have been accused of money laundering. Prosecutors would not comment on whether organized crime was also involved in the alleged scheme. Little of the stolen money has been recovered, authorities said. Prosecutors have seized $1.8 million from one defendant's account in Guernsey, in the UK's Channel Islands, and they say they are searching for other assets. The accused face up to 25 years in prison on charges ranging from grand larceny to enterprise corruption. All but one of the newly indicted defendants has been arrested. State securities regulators from Indiana, Alabama, and the North American Securities Administrators Association, among others, helped bring the case. --David Glovin in U.S. District Court in New York (212) 732- 9245,or at dglovin@Bloomberg.net, through the New York newsroom (212) 893-3665/ep