the Mob on Wall Street - CNBC Story

Discussion in 'Wall St. News' started by jsmooth, Mar 23, 2006.

  1. jsmooth


    Anyone have a link to the story CNBC was talking about today (thurs) at about 2:30 entitled 'the mob on wall street'? I just caught the end of the i'm curious about what new mob scam the FBI uncovered.....some pump and dump penny stock scam i assume?

    anyone have a link or read it in the WSJ/NYT recently?

  2. I've heard nothing of that, but I know there is a book about the mafia on Wall Street. It's called Born to Steal by Gary Weiss.
  3. Crime-Family Members Charged
    With Stock-Market Manipulation
    March 23, 2006 3:46 p.m.

    NEW YORK -- Members of the reputed Colombo and Luchese organized-crime families have been charged with manipulating the market for penny stocks as part of a broader racketeering case in Brooklyn, federal prosecutors said.

    In an indictment unsealed Thursday, the U.S. Attorney's Office in Brooklyn alleges at least six of 10 men the Federal Bureau of Investigation arrested on Thursday on racketeering charges secretly controlled at least 15 branch offices of brokerage firms in the New York City boroughs of Brooklyn, Manhattan and Staten Island.

    Through those branches, prosecutors claim they ran a scheme to artificially inflate the price of penny stocks. Many of the branches were in the heart of Manhattan's Financial District within blocks of the New York Stock Exchange.

    Prosecutors described it as a classic "pump and dump" scheme, in which licensed and unlicensed brokers misrepresented the prospects of certain stocks to potential investors, in exchange for large commissions.

    The defendants then sold their holdings in those stocks at inflated values, costing investors more than $20 million, the government said.

    The 10 men arrested are: Joseph Baudanza, 61 years old; Carmine Baudanza, 63; John Baudanza, 36; Jerry Degerolamo, 34; Arthur Gunning, 40; Craig Leszczak, 31; Craig Marino, 36; Robert Podlog, 32; Ronald Giallanzo, 35; and Vincent Rossetti, 40.

    They are facing charges ranging from racketeering and extortion to conspiracy and securities fraud.

    Lawyers for the men couldn't immediately be reached for comment Thursday.

    Prosecutors allege the prices of more than a dozen stocks were artificially manipulated as part of the scheme.

    They included shares of Legends Sports Inc., Axxess Inc., HTTP Technology Inc., Learner's World Inc., Rollerball International Inc., SIMS Communications Inc., Flexweight Corporation, Rick's Cabaret International Inc., Blini Hut Inc., Orex Gold Mines Corporation, Motorsports USA Inc., Evans Systems Inc., Silver Star Foods Inc. and America's Hedge Fund.

    Many of the stocks, which were allegedly referred to as "house stocks" by the defendants, were traded on the Over-the-Counter Bulletin Board or the Nasdaq small-cap stock market, the government said. They were mostly small companies, start-ups or companies that did no business at all, according to the indictment.

    Prosecutors said commissions of as much as 20% to 50% of the price of the house stock were paid to encourage brokers to tout them to the public. The brokers didn't disclose these commissions to the public, instead telling investors they would receive a nominal commission or no commission would be charged, according to the indictment.

    In order to hide the proceeds, the profits were laundered by wiring funds and making cash transfers through domestic and foreign banks, while utilizing nominee accounts and corporations to hide the true ownership of the illegal proceeds, the government said.

    Write to Chad Bray at chad.bray@dowjones.com1
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  4. ROFL....

    I know these people indicted as I used to work for a car dealer in Brooklyn NY and watched these Mafia boys every day a long long time ago...


    they have such a long criminal history but they always get off.... ALWAYS

    problem is someone else had to be running things as the defendants listed are by far some of the dumbest assclowns I have ever met...

    NO WAY they were smart enough to run thing... no way... "fuggettaboutit"
  5. jsmooth


    interesting article....thanks for the post
  6. Born to Steal was a fantastic book. I had a hard time putting it down and basically read it one night.

    I'm surprised that there was no mention of Systems of Excellence (SEXI.OB):)
  7. What is crime?

    Really - just basic Origin of Species stuff here. The police won't save you. Neither will the government. Politicians part of the party. Crime is just basic human behavior. We're all just opportunistic infections, really. Much easier to accept losses when fair values and expected returns are taken out of the life equation.
  8. I know nothing about this, the Mob ,pfff, just a figment of the Medias imagination.

    ...SGT. Schultz out