Trader, 13 Brokers Charged In $2M Boiler Room Scheme
13:51 EST Tuesday, January 13, 2004
NEW YORK (Dow Jones)--A former head trader and 13 former stock brokers at now- defunct Lloyd Wade Securities were indicted on charges they allegedly bilked investors out of $2 million by using "boiler room" tactics to inflate demand for NetBet Inc., an Internet gaming company.
Michael Niebuhr, who served as head trader, secretly bribed the 13 brokers to push NetBet securities on the firm's retail customers at predetermined prices, according to an indictment unsealed Tuesday in Manhattan federal court.
The brokers are charged with using high-pressure and misleading sales pitches, including a claim that they knew about pending litigation to legalize Internet gambling, which would have caused NetBet's stock price to rise.
Lloyd Wade handled about 70% of all retail trading in NetBet, of Newport Beach, Calif., between December 1996 to January 1999. The bribes allegedly paid to the brokers equaled as much as 50% of the total amount of customers' transactions in NetBet securities, according to the charges.
Niebuhr, 50, of Haleiwa, Hawaii, and the other former Lloyd Wade employees were charged with conspiracy and securities fraud and face up to 10 years in prison, plus fines, if convicted on the most serious count.
Twelve defendants arrested so far are scheduled to be arraigned later Tuesday before a magistrate judge.
The brokers charged in the alleged scheme are: Anthony Bisceglie, 35, of Seacaucus, N.J.; Richard LaGreca, 38, of Fairfield, N.J.; Michael Giangregorio, 32, of Staten Island, N.Y.; Nicholas Cianciaruso, 31, of Staten Island, N.Y.; Michael Colaiacovo Jr., 30, a resident of Kinnelon, N.J.; Richard Williams Jr., 30, of Wayne, N.J.; Raffi Oghlian, 28, of Westwood, N.J.; Ralph DeLuca, 27, of Madison, N.J.; Damon Piccolo, 32, of Staten Island, N.Y.; James Morgan Jr., 34, of Denton, Texas; Frank Cardone, 28, of Nutley, N.J.; Edward Machado, 31, of South Salem, N.Y.; Edward Gomez, 35, of Massapequa, N.Y.
-Colleen DeBaise, Dow Jones Newswires, 212-227-2017, colleen.debaise@ dowjones.com |
