Stadium Naples: Marchiano gets 10-30 years in prison, ordered to pay $8M restitution
Friday, November 9, 2001
By CATHY ZOLLO, crzollo@naplesnews.com
and GINA EDWARDS, gvedwards@naplesnews.com
NEW YORK — Calling Naples brokerage owner Anthony Marchiano a "master criminal," a Manhattan judge Thursday sentenced him to a maximum 10 to 30 years in prison and ordered him to pay $8 million in restitution to his victims.
The earliest he'll be eligible for release is 2011. Marchiano, who has been in jail since his July conviction on racketeering and stock fraud charges, expressed remorse for the way his company treated investor clients.
"Seeing how the dealings of A.S. Goldmen affected them, I was glad to give over most of my assets," Marchiano, 40, told the judge.
Anthony Marchiano
Snyder compared him to a drug dealer who sends minions to do the dirty work.
"You deliberately shielded and protected yourself," she told Marchiano. "I view you as a real criminal, a master criminal ... Throughout your career I can see you've had a total disregard for the law. It was because of your leadership that everyone else followed suit."
Marchiano is the "A" in the company name. Brother Salvatore — the "S" in A.S. Goldmen and a lesser figure in the company — was sentenced to between five and 15 years and ordered to pay almost $4 million restitution. They called themselves Goldmen — the men who make gold. But all they'll be making any time soon will be appeals to a higher court, according to their lawyers.
Marchiano used his brokers to pump up stock prices so Goldmen insiders could make millions in profits on rigged deals that wiped out thousands of ordinary investors, prosecutors said.
Regulators across the nation dubbed Goldmen one of the nation's most notorious boiler rooms, so named for the high-pressure sales pitches brokers used to seduce customers over the telephone.
The defunct firm, which had offices in Naples, New York and New Jersey, cheated customers out of nearly $100 million in a series of 10 stock schemes, including the failed Stadium Naples golf arena, prosecutors said.
Marchiano made $26 million on his rigged stock deals, prosecutors have said. And he tantalized young brokers with his lifestyle. Marchiano owns a posh Naples beachfront mansion at 3630 Gordon Drive and has a 30-strong luxury car collection that includes five Ferraris, a Lamborghini and Aston Martins. Prosecutors estimate Marchiano's Gordon Drive home at $5 million.
Prosecutors intend to pursue a civil forfeiture action to recoup money for duped investors, and the mansion will be sold along with some of the cars as part of the agreement nailed down Thursday.
Though he's known as a sharp dresser, Marchiano wore a loose maroon pullover and jeans to court and shot a chagrined look to his father, wife and other family members when he entered the courtroom.
His brother donned similar street garb for his sentencing, wearing a gray sweater and white pants. Each turned to obviously distressed family members as they were led in turn from the courtroom by bailiffs after sentencing.
After more than 6 1/2 months at trial, a jury of nine men and three women convicted Anthony Marchiano of racketeering and more than 50 other crimes in July. He had faced 8 1/3 to 25 years on the racketeering charge alone.
Outside court, Jeffrey Hoffman, Anthony Marchiano's attorney, said he had a number of issues to appeal to judges higher than Snyder, including her decisions on what jurors could and could not hear and her choice to keep jurors on the panel who'd expressed a dislike for his client.
Jurors were also not permitted to hear the investment histories of A.S. Goldmen customers who Hoffman said claimed ignorance about what was being done with their money.
"That's significant — whether they were really fooled," Hoffman argued outside court.
David Christian, a Georgia computer analyst who lost his roughly $20,000 nest egg on Goldmen-touted stocks, said Thursday he was pleased with the sentence. Although defense attorneys tried to portray investors as greedy, he said he was duped.
"They lied to me," Christian said. "I'm glad they're going to spend some quality time in New York prisons, which aren't cushy ones like the federal system."
Snyder, who's known for the harsh sentences she has handed down to murderers and drug dealers, said white-collar crime is more difficult to pin a punishment on. She added that a number of factors went into her call on the Goldmen case.
"The total loss to investors was staggering," Snyder noted before delivering the news that had a dozen family members on hand for the sentencing gripping each other and crying.
Talk of Salvatore Marchiano's relationship with his son brought tears from his wife. He, too, said he was sorry.
"I won't ask for compassion and leniency for me but for my wife and my son," he told Snyder.
The judge said she took the impact on defendants' families into consideration, but she said it was a lesser concern among others.
"The obvious answer is that the defendants should have thought of that when they committed the crime," Snyder said.
She got stacks of letters from investors who were hurt by the company, and such investors played a bigger factor in her sentence, Snyder said.
"This was a criminal enterprise that milked many people of their life's savings," Snyder said. The sentences were meant as a warning to others who might try the same.
Snyder gave broker Charles Trento, 33, of Staten Island, a sentence of four to 12 years in prison and ordered him to pay $1.4 million. Before bailiffs led him to jail, Trento tapped the courtroom's paneled wall with his ring as he waved goodbye to his wife.
Broker Paul Cilmi, who was acquitted of racketeering but found guilty of less-serious forgery crimes, was sentenced to two to four years in prison and ordered to pay $629,000.
Cilmi, 33, of Brooklyn, apologized to investors before his sentencing.
"I never had any intention of hurting anyone," Cilmi said.
Bruce Maffeo, a lawyer for Salvatore Marchiano, said he, too, planned to appeal but had yet to decide on what grounds. Charles Carnesi, Trento's lawyer, said the same. David Perlmutter, Cilmi's attorney said he doesn't plan to appeal.
Before Snyder handed down her sentence, prosecutors recapped the brokerage's crimes.
"The defendants had a license to earn money," Assistant District Attorney Paul Mahoney said. "And they used (them) as licenses to steal. They fed off the bottom of a booming economy."
Prosecutors with Manhattan District Attorney Robert Morgenthau's office are seeking up to $99 million in restitution for Goldmen customers from Marchiano and others in a companion civil forfeiture action. It wasn't immediately known how restitution collected might be disbursed to investor victims.
The Securities and Exchange Commission also has a civil action against Marchiano and Goldmen. However, restitution in the criminal case would likely satisfy related civil judgments should the SEC prevail.
SEC Associate Director of Enforcement William Baker said Thursday from his Washington, D.C., office that the sentences given by Snyder were stiff sanctions when measured against what's typical for stock fraud cases.
"Those are tough sentences and we're very pleased," Baker said. "I think the prospect of that time in a New York State prison will deter others."
At the end of the July trial, Snyder jailed both Marchiano brothers for the remainder of the case and removed a juror from the panel after a closed-door court session. Both brothers have since remained in jail in New York.
Brokers were accused of lying to customers, trading in customer accounts without permission and refusing to let customers sell shares as part of schemes to pump up stock prices.
The July 23 verdict culminated a four-year probe by Morgenthau's office that's netted charges against more than 36 Goldmen employees and associates, 11 of them from the defunct Naples office. Most defendants have pleaded guilty.
In July, jurors convicted brokerage managers Salvatore Marchiano and Trento of racketeering but acquitted broker Cilmi of the same charge.
Cilmi, his attorney suggested at trial, had a much lesser role at the firm than prosecutors suggested.
Jurors convicted Anthony Marchiano of a scheme to manipulate stock in Millennium Sports Management Inc., a financially failing New Jersey company that partnered on the twice-failed Stadium Naples golf arena brainchild of Bill Rasmussen.
Prosecutors said Marchiano — providing brokers with illegal insider information — used the Stadium Naples partnership and Rasmussen's claim to fame as the founder of ESPN to hype shares in Millennium, making more than $8 million in illicit profits on the stock sales in less than a year.
Jurors acquitted Marchiano of manipulating the securities of Stadium Capital Inc., Rasmussen's start-up company that sold only a few shares to the public before the deal collapsed in June 1998.
Rasmussen's first try at Stadium Naples is the subject of influence-peddling charges in the Collier County corruption case that has included charges against three former Collier County commissioners, the county's former manager, four developers, a lawyer and Rasmussen.
Rasmussen, who has rejected a plea deal and vowed to take his case to a jury, is charged with conducting a racketeering conspiracy to bribe local officials and faces up to 30 years in prison if convicted.
During the trial, Anthony Marchiano's attorney, Hoffman, blamed rogue activities at A.S. Goldmen on others — including former Chief Financial Officer Stuart Winkler — and said firm underlings kept Marchiano in the dark. In his closing argument, Hoffman flashed dozens of statements of witnesses who said they didn't tell Marchiano about illegal activities.
Winkler hired a hitman to kill Snyder after she threw him in jail on a bail violation. A jury convicted Winkler in December of attempting the failed murder-for-hire plot, which didn't harm the judge. He's serving up to 34 years, which includes up to nine years for his stock fraud and racketeering guilty plea.
After his indictment in July 1999, a civil judge froze Marchiano's assets, but allowed him to spend $16,000 a month on living expenses and $1.4 million on his legal defense.
A major player in the world of small company stocks, A.S.Goldmen at various times employed at least a dozen stockbrokers later linked to mob crime families in other federal busts. In pretrial hearings, prosecutors said Genovese capo, or captain, Alphonse "Ally Shades" Malangone initially bankrolled Marchiano's firm.
But jurors weren't permitted to hear such evidence. Jurors heard about a Brooklyn businessman and a muscular enforcer who beat up a misbehaving broker at the firm. But jurors weren't told that prosecutors believed both men to be Genovese associates. In 1999, a former A.S. Goldmen broker and another stock promoter were executed gangland-style in a Colts Neck, N.J., mansion. The killings remain unsolved.
Defense lawyers urged Snyder to erase mentions of alleged connections to organized crime in reports that will follow the defendants through their prison sentences.
Snyder refused.
"That doesn't mean (the connections) weren't there," Snyder said.
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