Speaking of gyms.. we were speaking of gyms weren't we?
To: +Dave Rasmussen (636 )
From: +Charles A. King
Friday, Jan 22 1999 11:45AM ET
Reply # of 637
Four alleged mobsters plead guilty in Wall Street extortion case
Copyright © 1999 Nando Media
Copyright © 1999 Associated Press
By LARRY NEUMEISTER
NEW YORK (January 22, 1999 8:24 a.m. EST
nandotimes.com) - As alleged mobster John
Cerasini left court, he smiled as he was asked
whether he ever made money on Wall Street.
"Tons," he answered.
Cerasini was among four reputed mobsters who
pleaded guilty Thursday to a scheme to drive up the
price of an Arizona company's stock by forcing young
Wall Street brokers to promote it to their customers.
Authorities say the 1997 conspiracy netted the men
more than $1.3 million in the largest case ever
involving organized crime influencing the stock
market.
The price of HealthTech International Inc., which owns
fitness centers, rose after the participants made a
deal with the company's chairman and then brokers
convinced unwitting buyers the stock was severely
undervalued.
Rosario Gangi, 59, an alleged captain in the
Genovese family, and Frank Lino, 61, an alleged
Bonanno family captain, were among those who
arranged secret payments to brokers and principals
at Meyers Pollock & Robbins Inc.
Both pleaded guilty to securities and extortion
conspiracy charges.
Eugene Lombardo, 47, a reputed associate of the
Bonanno family who admitted using threats to get
what he wanted, also pleaded guilty, as did alleged
Bonanno soldier Cerasini, 60.
All face less than a decade in prison.
HealthTech Chairman Gordon Hall has pleaded
innocent to charges and is awaiting trial. Three
employees of the now-defunct firm, including two
brokers, pleaded guilty to conspiracy to commit
securities fraud.
Lombardo said the mob was looking to extend its
influence over Wall Street by inserting its own people
as brokers at Meyers Pollock.
He told the judge that he had threatened to use force
to remove a Meyers Pollock employee who was
preventing mob-backed people from being hired.
nandotimes.com.
+++++++++++++++=
Friday January 22 12:38 AM ET
Alleged Mob Captains Plead Guilty In Stock Case
By Gail Appleson, Law Correspondent
NEW YORK (Reuters) - Two alleged organized crime family captains were among
seven
defendants who pleaded guilty Thursday to a scheme in which mob members helped
pump up share
prices and defraud investors out of millions of dollars.
The men were named in a 97-page racketeering indictment that alleged the Bonanno
and Genovese
organized crime families were involved in a scheme in which brokers at New York's
Meyers Pollock
Robins Inc. used illegal sales tactics to boost the price of HealthTech International Inc.
securities.
Prosecutors alleged that the crime families joined forces with unscrupulous stock
promoters and
HealthTech officers to infiltrate Meyers Pollock and then used threats, extortion and
violence as part
of a scheme to manipulate stock prices.
There were a total of 19 defendants named in the 1997 indictment, including members
of the crime
families, several stockbrokers, a disbarred lawyer and two officers of Mesa,
Ariz.-based
HealthTech, which owns health and fitness clubs.
Of those, a total of 11 have now admitted guilt.
Among those pleading guilty Thursday in Manhattan federal court were Rosario Gangi,
59 an alleged
capo, or captain, in the Genovese organized crime family, and Frank Lino, 61, an
alleged capo in the
Bonanno family. Both men are from Brooklyn.
Both men admitted participating in conspiracies to commit securities fraud and extortion.
In pleading guilty, Gangi said he was not personally involved in extortion but said that it
was
''reasonably foreseeable that some threat of force would be used.''
Others pleading guilty were the disbarred securities lawyer Irwin Schneider and John
''Boobie''
Cerasani, an alleged soldier in the Bonanno family.
The indictment charged that the defendants joined in a plot beginning in 1996 to drive up
HealthTech's stock price by duping investors. Prosecutors said investors in California,
Massachusetts, Michigan, Oklahoma, New York, Tennessee and West Virginia lost
millions of
dollars because of the conspiracy.
According to the charges, the crime families allegedly entered into an agreement with
Gordon Hall,
head of HealthTech, to raise the price of his company's stock artificially. Hall is a
defendant in the
case and is awaiting trial.
As part of the scheme, certain brokers at Meyers Pollock allegedly used high-pressure
boiler-room sales practices to induce customers to buy HealthTech securities. They
allegedly misled investors
about the nature and quality of HealthTech and its securities.
The indictment charges that in 1997 members of the crime families helped the
defendants by
extorting and threatening brokers at Meyers Pollock to maintain their control over the
firm.
Prosecutors alleged that Meyers Pollock brokers were responsible for more than 80
percent of all
retail customer purchases in HealthTech warrants in May and June of 1997.
On Nov. 17, 1997, the Securities and Exchange Commission suspended trading in the
company's
stock and warrants due to questions about the accuracy of public information.
Questions or Comments
Copyright © 1999 Reuters Limited. All rights reserved.
Republication or redistribution of Reuters content is expressly prohibited without the
prior written consent of
Reuters.
Reuters shall not be liable for any errors or delays in the content, or for any actions
taken in reliance thereon.
dailynews.yahoo.com.
++++++++++++++
January 22, 1999
2 Linked to Mob Admit Role in Stock
Manipulation Scheme
By BENJAMIN WEISER
wo reputed mob figures pleaded guilty Thursday to charges that
they had participated in a conspiracy to manipulate the price of a
stock in a scheme the authorities have called the most ambitious yet by
organized crime to infiltrate Wall Street.
Five other men also pleaded guilty Thursday in connection with the
scheme, which has been widely cited as evidence that organized crime
has trained its sights on the lucrative bull market after law enforcement
curtailed its influence in more traditional areas, like garbage hauling and
the garment business. A total of 11 people have now pleaded guilty in the
case.
Mary Jo White, the United States Attorney in Manhattan, said, "The
guilty pleas in this case to extortion and stock fraud, the most serious acts
of racketeering charged in the indictment, fully vindicate the public's
interest in punishing and deterring organized-crime infiltration into the
stock market."
A Federal racketeering indictment had charged in 1997 that high-ranking
members of the Bonanno and Genovese crime families had cooperated to
make millions of dollars and dupe investors in seven states.
As two Federal prosecutors, Celeste L. Koeleveld and Douglas M.
Lankler, outlined the scheme during yesterday's court hearings, it had
involved a plan to inflate artificially the price of shares of Healthtech
International, based in Mesa, Ariz., which owns physical fitness clubs.
The crime family members bribed a group of brokers at a small Wall
Street brokerage house, Meyers Pollock Robbins, to sell Healthtech
stock to unsuspecting investors, prosecutors have charged.
After the brokers used high-pressure tactics to sell the stock shares, the
conspirators sold the shares they owned before the price plummeted, the
authorities said.
Two of the men who entered pleas yesterday in Federal District Court in
Manhattan to securities and extortion conspiracy charges -- Rosario
Gangi, 59, and Frank Lino, 61 -- were described in the Federal
indictment as captains in the Genovese and Bonanno crime families,
respectively. In court, each man admitted to Judge Denny Chin that he
had participated in the scheme and knew that it was illegal.
The Healthtech case was also notable because Federal authorities had
inadvertently made public a copy of a sensitive prosecution strategy
memorandum that included a candid look at the strengths and
weaknesses of the Government's case and the identities of potential
witnesses.
Ms. White said disclosure of the memo "had no influence" on the
disposition of the case. She said the guilty pleas came after defense
lawyers were "apprised of the strength of the Government's case" and
Judge Chin ruled against the defense in pretrial motions.
The Government had taken steps to insure the safety of witnesses after
the memorandum was disclosed, she added.
Several defense lawyers in court yesterday generally agreed. Gangi's
lawyer, Joseph Tacopina, said access to the memo had not ultimately
changed the result for his client, although he said the document had made
"interesting reading."
Gangi could receive a term of 87 to 108 months in prison, prosecutors
said, which may run concurrently with a 70-month term he is now serving
in an unrelated case.
Lino faces about five to six years in prison.
Both men will be sentenced next May.
Charges are still pending against nine other defendants in the case,
including Gordon Hall, chairman of Healthtech.
Hall, who is scheduled for trial next month, continues to maintain his
innocence, said his lawyer, James J. McGuire, "and we expect to
proceed to trial."
In court Thursday, Judge Chin carefully questioned some of the
defendants about their roles in the scheme. One, Sal Taddeo, 30, who
worked at Meyers Pollock, told the judge that he knew that as more
shares were sold, the stock price would rise.
"And money would be made," he added.
"Was the intent to drive the price up?" Judge Chin asked.
"Yes," Taddeo replied.
Copyright 1999 The New York Times Company
nytimes.com
Seven defendants pleaded guilty in a stock-fraud case that revealed
organized crime's hand in the manipulation of penny-stock prices, said
prosecutors in the U.S. attorney's office in New York. Four people
pleaded guilty earlier, and eight others have yet to enter pleas. The
defendants, who include figures from the Bonanno and Genovese
organized-crime families of New York, used intimidation and bribery to
manipulate shares of HealthTech International, an Arizona health-club
operator, prosecutors said.
washingtonpost.com.
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