USA: 19 DEFENDANTS INCLUDING BOTH BANKERS & MEMBERS OF ORGANISED CRIME CHARGED WITH PARTICIPATING IN LARGE SCALE STOCK FRAUD

Record ID: 565962

  • Title: USA: 19 DEFENDANTS INCLUDING BOTH BANKERS & MEMBERS OF ORGANISED CRIME CHARGED WITH PARTICIPATING IN LARGE SCALE STOCK FRAUD
  • Date: 2nd March 2000
  • Summary: BROOKLYN, NEW YORK, UNITED STATES (MARCH 2, 2000) (REUTERS) 1. WIDE: UNITED STATES (U.S.) ATTORNEY'S OFFICE NEWS CONFERENCE 0.06 2. SV: (SOUNDBITE) (English) LORETTA E LYNCH, UNITED STATES ATTORNEY FOR THE EASTER DISTRICT OF NEW YORK SAYING "This prosecution sends the strong and clear message: That law enforcement will marshal its resources to combat the corrupt union of organized crime and large scale stock fraud. The breadth of these charges, racketeering, stock fraud, extortion, money laundering, reflects the serious and widespread nature of this problem. This indictment not only targets the brokers, who exploited the public, but also the dishonest companies who profited from the schemes; the money launderers who worked to shuttle the money back and forth from offshore accounts, and the organized crime figures who protected and promoted this criminal enterprise." 0.45 3. C/A: REPORTERS AT NEWS CONFERENCE (2 SHOTS) 0.51 4. SV: (SOUNDBITE) (English) HOWARD SAFIR, COMMISSIONER, NEW YORK CITY POLICE DEPARTMENT SAYING "This case began with a relatively minor search of a locker and ended up with a major forty million dollar stock fraud investigations and it shows how Russian organised crime and traditional organised crime are getting together to get involved in much more sophisticated crimes in this city." 1.14 5. WIDE: NEWS CONFERENCE (2 SHOTS) 1.22 Initials Script is copyright Reuters Limited. All rights reserved
  • Embargoed: 17th March 2000 12:00
  • Keywords:
  • Location: BROOKLYN, NEW YORK, UNITED STATES
  • City:
  • Country: USA
  • Reuters ID: LVADOK3YA2KZBZANAL45LEJ6YOT5
  • Story Text: In what prosecutors are calling an example of the link
    between organised crime and Wall Street, 19 defendants,
    including bankers and members of organised crime families,
    have been charged with participating in large-scale stock
    fraud and money laundering schemes.

    A total of 19 defendants were indicted in a 40 million
    U.S.dollars stock fraud scheme on Thursday (March 2), that
    was allegedly protected and promoted by organised crime.

    In what was described as "Goodfellas meets the Boiler
    Room," this case highlights a link between organised crime and
    Wall Street.

    The charges in the indictment centre on the activities of
    two now-defunct brokerage firms with offices in downtown
    Manhattan: White Rock Partners & Co and State Street Capital
    Markets.

    The indictment alleges that the principals of the brokerage
    firms, together with other brokers and brokerage firms,
    planned ad carried out a series of fraudulent securities
    schemes then laundered tens of millions of dollars of illicit
    profits between 1993 and 1996.

    Of the 19 defendants, six were members and associates of
    various organised crime families and allegedly have
    connections to Russian organised crime.

    Loretta Lynch, the United States Attorney for the
    Eastern District of New York said, "This prosecution sends the
    strong and clear message: That law enforcement will marshal
    its resources to combat the corrupt union of organized crime
    and large scale stock fraud.The breadth of these charges,
    racketeering, stock fraud, extortion, money laundering,
    reflects the serious and widespread nature of this problem.

    This indictment not only targets the brokers, who exploited
    the public, but also the dishonest companies who profited from
    the schemes; the money launderers who worked to shuttle the
    money back and forth from offshore accounts, and the organized
    crime figures who protected and promoted this criminal
    enterprise."
    At 6am Thursday, a collaborative field team including
    members of the Federal Bureau of Investigation (FBI) and the
    New York Police Department began arresting the suspects in
    "Operation Street Cleaner".Twelve were taken into custody and
    four were expected to surrender to the FBI Thursday or Friday
    (March 3).Two were already in FBI custody and the final
    defendant is abroad.

    Howard Safir, the New York City Police Commissioner
    said, "This case began with a relatively minor search of a
    locker and ended up with a major 40 million dollar stock fraud
    investigations and it shows how Russian organised crime and
    traditional organised crime are getting together to get
    involved in much more sophisticated crimes in this city."
    The indictment alleges White Rock and State Street secretly
    acquired large blocks of stock and warrants in four companies.

    Typically investors had paid between 1,000 U.S.dollars and
    10,000 dollars to buy stock, which often rose to 6 - 7 U.S.

    dollars before the defendants dumped it and the share price
    fell to virtually nothing.The defendants are thought to have
    netted around 41 million U.S.dollars.


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