NEW YORK (AP) -- More than 40 employees of a securities firm that has been the target of several investigations have been charged with promoting worthless stock, costing investors more than $83 million.
Manhattan District Attorney Robert Morgenthau said 22 people pleaded guilty and 20 others have been indicted for lying to 16,000 investors about themselves, their firm and the stock they were selling.
The firm itself, Meyers Pollock Robbins Inc., was indicted and charged with enterprise corruption, Morgenthau said. The company had offices in Manhattan, Long Island, Las Vegas, and Fort Lauderdale and Boca Raton, Fla.
The brokerage, shut down by state regulators in 1997, was the workplace of many past grand jury targets, including some salesmen who took bribes from mobsters to promote specific stocks and thereby drive up share prices.
Four mobsters plead guilty
For example, Michael Paul Cilmi, 34, of Brooklyn pleaded guilty last week to enterprise corruption for crimes committed at Meyers Pollock and A.S. Goldmen, another brokerage. He faces up to 25 years in prison when he is sentenced June 27.
In January, four reputed mobsters pleaded guilty in Manhattan's U.S. District Court to charges of forcing brokers at Meyers Pollock to promote a stock in a 1997 scheme that netted them more than $1.3 million.
Morgenthau said many of the defendants knew each other because they had crossed paths while working at other crooked brokerages.
'Make Wall Street safe'
Morgenthau said the current indictment covers frauds in which the investors lost $83 million, but he estimated that the total investment lost during the company's existence from 1992 until 1997 was about $176 million. In that time, he said, Meyers Pollock brokers pushed almost two dozen worthless stocks.
Assistant District Attorney John Moscow, who headed the investigation, said some of the worthless securities were listed on stock exchanges and others were not. None of those stocks are traded now, he said.
Joseph Borg of the Alabama Securities Commission, which participated in the investigation, said, "You've got to make Wall Street safe for the Main Street investor. We've gone from being a nation of savers to a nation of investors."
One Meyers Pollock victim was a nursing-home resident who lost more than $100,000 after the company's brokers made unauthorized trades, Morgenthau said. He said she lost 95 percent of her money and her son-in-law had to take a second job so that she could stay in the nursing home.
Morgenthau said 19 of the 20 who were named in the current indictment but have not pleaded guilty were in custody, and one was a fugitive in Canada.
The top count in the indictment, enterprise corruption, is punishable by up to 25 years in prison. Lesser larceny, bribery, business violations and related counts have maximum penalties that range from four to 15 years.