Mob Brokerage Bust:
Members of three reputed New York crime families were indicted in late March for alleged involvement in racketeering and extortion in connection with a number of boiler-room stock schemes.
In a 73-page federal grand jury indictment in the U.S. District Court of the Eastern District of New York, 10 members of the Bonanno, Luchese and Colombo crime families were charged with racketeering conspiracy including securities fraud, extortion, witness tampering, kidnapping and money laundering. All 10 have pleaded not guilty.
According to the indictment, between 1994 and 2004, the defendants controlled at least 15 branch offices of 15 different brokerage firms in Manhattan, Brooklyn and Staten Island.
Brokers used classic pump-and-dump schemes to flog more than a dozen penny stocks, and received between 20 percent and 50 percent commissions on the sales. The estimated loss to victims is more than $20 million. To ensure brokers played along, mobsters used “enforced discipline” to deal with the uncooperative. According to the U.S. Attorney, “in one instance, a stock promoter was kidnapped and chained to a pit bull.” In another, “a cold-caller was hit over the head with a golf club,” and one broker was stabbed after expressing his desire to leave the firm. — JC
Footballing Felon Broker:
Adrian Cooper, a 37-year-old Merrill Lynch broker and former Pittsburgh Steeler, pleaded guilty to securities fraud and money laundering in March.
Cooper, who played with three different teams over six seasons in the NFL, confessed to cheating more than 10 people out of approximately $400,000 between 1999 and 2004, using the money to pay for personal living expenses. He faces a maximum punishment of 35 years in prison and $500,000 in fines.