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Microcap & Penny Stocks : Healthtech (GYMM) -- Ignore unavailable to you. Want to Upgrade?

To: Steve who wrote (663)	5/12/1999 12:14:00 AM
From: john	Read Replies (2) \| Respond to of 687

It is over, but now what? NEW YORK, May 11 (Reuters) - The chairman of HealthTech International Inc. (GYMM - news) was convicted on Tuesday of conspiring with organized crime family members to pump up shares of the company's stock and defraud investors. Gordon Hall was convicted by a Manhattan federal jury of all 12 counts against him, including racketeering, securities and wire fraud. Prosecutors said that as of Tuesday morning Hall was still chairman, but a receptionist at the Mesa, Ariz., offices of the health and fitness club operator refused to say whether Hall still heads the company. The jury also convicted Michael Motsykulashvili, a broker involved in the scheme, of the same charges. Both men are scheduled to be sentenced on Sept. 8 and they face a possible prison term of 40 years on the racketeering charges alone. Fourteen other defendants, including two mob captains, had previously pleaded guilty to their role in the scheme. Charges are still pending against four other defendants. The defendants had originally been 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 now defunct Meyers Pollock Robins Inc. used illegal sales tactics to boost the price of HealthTech securities. Prosecutors alleged that the crime families joined forces with unscrupulous stock promoters and HealthTech officers to infiltrate Meyers Pollock and then used bribes, threats, and violence as part of a scheme to manipulate stock prices. The 1997 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. Evidence presented at the trial showed that in late 1996 Hall hired stock promoters including an associate of the Bonanno crime family to bribe stock brokers to push up shares of HealthTech. Among those brokers was Motsykulashvili who also helped supervise and pay off a group of brokers at a Meyers Pollock branch in Long Island, N.Y. The scheme was later expanded to include the firm's Wall Street branch. The brokers at Meyers Pollock used high-pressure boiler-room sales practices to induce customers to buy HealthTech securities and misled investors about the nature and quality of HealthTech and its securities. The indictment charged that members of the crime families helped the defendants by extorting and threatening brokers at Meyers Pollock to maintain their control over the firm. As a result of the scheme, price and trading volume of HealthTech securities rose dramatically. Hundreds of people later lost their investments when the defendants stopped paying off the brokers and the price of the securities plummeted. 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.