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EXHIBIT 99.2
UNITED STATES ATTORNEY
SOUTHERN DISTRICT OF NEW YORK
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FOR IMMEDIATE RELEASE
JUNE 14, 2000
CONTACT:
U.S. Attorney's Office Patrick J. Smith
Marvin Smilon, Herbert Hadad (212) 637-2409
Public Information Office
(212) 637-2600 David C. Esseks
(212) 637-2328
Federal Bureau of Investigation
Joseph A. Valiquette Christopher J. Clark
(212) 384-2715 (212) 637-2205
James M. Margolin
(212) 384-2720 Stephanie B. Isser
(212) 637-2633
U.S. Securities & Exchange Commission
Chris Ullman Mylan L. Denerstein
(202) 942-0020 (212) 637-1022
Jason Sabot
(212) 637-2398
PRESS RELEASE
MARY JO WHITE, the United States Attorney for the Southern District of
New York and BARRY W. MAWN, the Assistant Director in Charge of the New York
Office of the Federal Bureau of Investigation ("FBI"), joined by RICHARD WALKER,
Director of Enforcement of the United States Securities and Exchange Commission
("SEC"), and MARY L. SHAPIRO, the President of NASD Regulation, announced today
that 120 defendants, including members and associates of the five Organized
Crime Families of La Cosa Nostra in the New York City area, have been charged
with securities fraud and related crimes. Sixteen Indictments and seven criminal
Complaints unsealed today in
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Manhattan federal court allege fraud in connection with the publicly traded
securities of 19 companies and the private placement of securities of 16 other
companies.
Included among the defendants are 10 alleged members and associates of
organized crime; a former New York Police Department detective; 57 licensed and
unlicensed stock brokers; three recruiters of corrupt brokers; 12 stock
promoters; 30 officers, directors or other "insiders" of the companies issuing
the securities involved in the frauds; two accountants, an attorney; an
investment adviser; and a hedge fund manager. According to the charges 21
broker-dealers or other financial adviser firms were either involved in the
frauds, or employed stock brokers or other persons who were involved in the
fraud. The various schemes resulted in total losses of more than approximately
$50 million, and many tens of millions more would have resulted had the schemes
been completed.
According to Ms. WHITE and Mr. MAWN, this is the largest number of
defendants ever arrested at one time on securities fraud-related charges, and
one of the largest number ever arrested in a criminal case of any kind. In
coordination with today's arrests, search warrants were executed at four
locations in New York, one in Dallas, Texas, and one in Salt Lake City, Utah.
Twenty-one defendants are charged with participating in a RICO
Enterprise consisting of members and associates of the Bonanno and Colombo
Organized Crime Families of La Cosa Nostra in the New York City area, that
allegedly perpetrated massive securities fraud over a five-year period by
forging corrupt alliances with members and associates of the remaining three New
York City Organized Crime Families; controlling
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and infiltrating broker-dealers; conspiring with issuers of securities and
individual stock brokers; scheming to defraud union pension plans; and employing
tactics of violence, including threats, extortion, physical intimidation, and
the solicitation of murder to, further the illegal goals of the RICO Enterprise.
The schemers used traditional boiler-room operations and current Internet
techniques to carry out their alleged crimes.
The racketeering defendants including, among others: ROBERT A. LINO,
a/k/a "Little Robert," an alleged capo in the Bonanno Crime Family; FRANK A
PERSICO, an alleged associate of the Colombo Crime Family, and a registered
stock broker who controlled crews of brokers at various brokerage firms,
including First Liberty Investment Group, Inc., William Scott & Company, Inc.,
and Bryn Mawr Investment Group; ANTHONY P. STROPOLI, an alleged soldier in the
Colombo Crime Family who controlled crews of stock brokers; STEPHEN E. GARDELL,
who is alleged to have corruptly exploited his positions as a New York City
Police Department Detective and Treasurer of the Detectives' Endowment
Association ("DEA"); GENE PHILLIPS, who controlled Basic Capital Management, the
investment adviser to American Realty Trust, a New York Stock Exchange-listed
real estate investment trust, or REIT; and WILLIAM M. STEPHENS, the Chief
Investment Strategist of Husic Capital Management, a San Francisco-based
investment adviser, who agreed to manage up to $300 million in union pension
funds knowing that a portion would be invested in corrupt deals for the purpose
of funding kickbacks to members of the RICO Enterprise and corrupt union
officials.
The RICO Enterprise is alleged to have engineered manipulation schemes
in eight publicly traded securities and to have defrauded investors in
connection with three private placements of securities, including one by Ranch*1
Inc., a company that operates fast
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food restaurants in the New York City area and elsewhere. Two officers of
Ranch*1, SEBASTIAN RAMETTA and JAMES F. CHICKARA, have been named as defendants
in the RICO charges and are alleged to be associates of the Colombo Crime
Family.
In addition to the racketeering charges, the other Indictments and
Complaints unsealed today charge a wide array of stock market schemes designed
to fleece the investing public. Sales of stock in private placements are alleged
to have been fraudulently rigged for the benefit of insiders and corrupt
brokers. The Internet was allegedly used to further the schemes through the
fraudulent promotion of stocks on Internet websites, or the use of companies
that were touted as Internet or "dot.com" companies in order to induce investors
to capitalize on the Internet boom.
Today's charges are the result of a highly successful, one-year
undercover operation conducted by the FBI's New York Office, in coordination
with the SEC and with assistance provided by NASD Regulation, Inc. The
undercover investigation involved, among other things, surveillance, the use of
undercover purchases of securities, the use of a series of cooperating witnesses
who posed as willing participants in ongoing criminal schemes, and the
installation of court-authorized eavesdropping devices in the office of DMN
Capital Investments, Inc. ("DMN Capital"), a financial adviser firm that held
itself out as providing investment banking and stock promotion services.
Pursuant to court order, the FBI recorded approximately 1000 hours of
conversations occurring in DMN Capital's office between December 1, 1989 and May
4, 2000.
Ms. WHITE stated:
Today's charges result primarily from the FBI's successful infiltration
of a company that served as investment banker to the crooked and the
corrupt.
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By offering its services to anyone and any deal, as long as it was
illicit, the company attracted allegedly mobbed-up broker-dealers,
top-shelf investment advisers, unscrupulous issuers, unethical lawyers
and accountants, and microcap manipulators -- a virtual Who's Who of
securities violators. Their tentacles of fraud roached into every
corner of the public and private securities markets, and they preyed on
their victims using both traditional boiler-room tactics and
contemporary Internet-based manipulations. As today's charges show,
fraud in the markets will not be tolerated, no matter how big, how
organized, or how creative.
Mr. MAWN stated:
The FBI investigation code named "Upstick" has uncovered a laundry list
of stock manipulation schemes by which the defendant brokers took their
victims to the cleaners. This investigation uncovered once again La
Cosa Nostra's efforts to infiltrate the securities markets. No matter
what market the mob tries to infiltrate, from the fish market to the
stock market, the methods it uses are always the same: violence and the
threat of violence. We will continue to investigate securities fraud
schemes whether they be the work of typical white collar criminals or
of organized crime.
Mr. WALKER stated:
The securities fraud involved in today's actions is among the most
egregious witnessed in recent years. These manipulations of numerous
microcap stocks were designed for the sole purpose of stealing
investors' hard-earned dollars. The prosecutions announced today rid
the vital market for low-priced securities of unscrupulous operators
and reaffirm regulators' commitment to keeping this market safe and
fair.
Ms. SHAPIRO stated:
Today's actions by United States Attorney Mary Jo White again
demonstrate her commitment to help rid securities markets of
manipulative and fraudulent schemes. NASD Regulation previously brought
actions against a number of firms and individuals named in the
Indictments unsealed today and will continue to work closely with the
United States Attorney's Office and other law enforcement and
regulatory agencies to insure investor confidence and the integrity of
our markets.
Certain of the charges are outlined below.
RACKETEERING
In United States v. Lino, et al., 00 Cr. 632, 21 defendants are charged
with being members and associates of a RICO Enterprise consisting of DMN Capital
and a "joint
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venture" among members and associates of the Bonanno and Colombo Crime Families,
with the assistance of associates of the other three New York City crime
families, as well as others. In addition to LINO, PERSICO, STROPOLI, GARDELL,
RAMETTA, CHICKARA, STEPHENS, and PHILLIPS, the other alleged members of the RICO
enterprise include: JAMES S. LABATE, a/k/a "Jimmy"; SALVATORE R. PIAZZA, a/k/a
"Sal"; CARY F. CIMINO; RALPH DEMATTEO, a/k/a "Ralphie"; ROBERT P. GALLO, a/k/a
"Bobby"; MICHAEL GRECCO; JOHN M. BLACK, JR.; ANGELO CALVELLO, a/k/a "Tony";
JOSEPH A. MANN, a/k/a "Andy"; GLENN B. LAKEN; A. CAL ROSSI; VINCENT G. LANGELLA,
a/k/a "Vinny", WILLIAM M. PALLA; and TODD NEJAIME. The Lino Indictment charges
the defendants with various crimes, including those described below: ----
1. Manipulation of Publicly Traded Securities: Between 1995 and 1999,
members of the RICO Enterprises fraudulently obtained and controlled large
blocks of free or substantially-discounted, publicly-traded securities in
violation of various SEC rules and regulations. These securities included those
issued by: (1) Spaceplex Amusement Centers International Ltd., which operated
amusement parks and was located in Great Neck, New York; (2) Reclaim, Inc.,
which was in the business of recycling roofing shingles and was located in
Tampa, Florida; (3) Beachport Entertainment Corp., which was in the business of
producing ice skating entertainment and was located in Los Angeles, California;
(4) International Nursing Services, Inc., which was in the business of in-home
nursing care and was located in Denver, Colorado; (5) Leasing Edge Corporation,
which was in the computer leasing business; (6) Globus Int'l Resources
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Corp., an import-export company; (7) Innovative Medical Services, a manufacturer
of waste purification systems; and (8) Accessible Software, Inc., a software
developer.
The RICO Enterprise is alleged to have secretly controlled or
infiltrated various New York City-area brokerage firms, including Monitor
Investment Group, Inc., Meyers Pollock and Robbins, First Liberty Investment
Group, Inc., William Scott & Company, and Atlantic General Financial Group. The
RICO Enterprise then fraudulently engaged in prearranged trades, paid secret
bribes to corrupt stock brokers, and used "no net sale" and other "boiler room"
tactics, among other devices, to create artificial retail demand for these
securities, and then sold their holdings into that inflated demand at
considerable profit. Members of the RICO Enterprise, in order to enforce
discipline among the brokers allegedly involved in these schemes, and to punish
those who reneged on their agreements to sell stock in return for bribes,
subjected brokers to beatings, intimidation, and threats. To aid in the
fraudulent schemes, CARY F. CIMINO, a New York-based stock promoter, arranged
for secret bribes to be paid to corrupt brokers and, in 1999, CIMINO is alleged
to have solicited the murder of a person he believed to be a cooperating
witness.
2. Union Pension Funds Fraud and Kickback Schemes: From late 1999 to the
present, the RICO Enterprise allegedly sought to defraud union pension funds by
employing corrupt securities industry professionals to manage union pension
funds, and then, with the knowledge and consent of those professionals,
structuring investments for those funds in a manner that allowed for a secret
diversion of a portion of the funds to members of the RICO Enterprise and to
corrupt union officials. One such alleged fraudulent investment was a preferred
stock offering of American Realty Trust, a NYSE-
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listed REIT that trades under the ticker symbol "ARB." The RICO Enterprise
allegedly arranged this corrupt deal through GENE PHILLIPS, who controlled Basic
Capital Management, Inc., a Dallas, Texas-based financial adviser firm that
served as adviser to American Realty Trust, and A. CAL ROSSI, the Managing
Director of Capital Markets for Basic Capital. According to the charges, union
pension fund assets would be invested in the offering, and $2.0 million of every
$10 million invested would be "kicked back" to the RICO Enterprise and corrupt
union officials. In order to give an investment in ARB Series J preferred stock
an air of legitimacy, and to convince honest union officials to permit such an
investment, the Enterprise recruited an allegedly corrupt money manager, WILLIAM
M. STEPHENS, the Chief Investment Officer of Husic Capital Management, a San
Francisco-based investment adviser, who allegedly agreed to manage up to $300
million in union pension funds knowing that a portion would be invested in this
corrupt deal for the purpose of funding kickbacks to members of the RICO
Enterprise and corrupt union officials.
A second allegedly fraudulent investment deal designed to defraud union
pension funds involved TradeVentureFund, a hedge fund that claimed to have a
successful proprietary trading strategy, and whose principal manager was GLENN
B. LAKEN. Here, kickbacks to the RICO Enterprise and corrupt union officials
would allegedly be funded through the payment of excessive trading commissions
and LAKEN's plan to invest the union pension funds in high-risk investments.
The pension funds targeted in these allegedly corrupt schemes include:
the Production Workers Local 400, which is alleged to be influenced by the
Colombo Crime Family; the International Union of Operating Engineers Local 137;
and the Detectives'
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Endowment Association ("DEA"), which serves NYPD detectives. Integral to the
success of the alleged schemes involving DEA and Local 400 were STEPHEN E.
GARDELL and FRANK A. PERSICO, a/k/a "Frankie", the latter of whom was an alleged
associate of the Colombo Crime Family who served as the Treasurer of Production
Workers Local 400, each of whom is alleged to have agreed to accept illegal
kickbacks to corruptly influence decisions at their respective unions. GARDELL
is also alleged to have: (a) leaked confidential law enforcement information
concerning organized crime investigations to members and associates of organized
crime; (b) assisted in securing firearm "carry" permits for members of organized
crime; (c) influenced the outcome of an NYPD investigation into the activities
of a member of the RICO Enterprise; and (d) provided New York City law
enforcement parking permits to members of organized crime. In return, GARDELL is
alleged to have received, among other things, cash and property from organized
crime figures, including $8,000 toward the building of a swimming pool at his
residence, free and substantially-discounted rooms and meals at casinos in Las
Vegas and Atlantic City, and a fur coat.
3. Private Placement Fraud: From approximately October 1999 to the June
2000, the RICO Enterprise allegedly sought to defraud investors in the private
placement of securities by arranging for the payment of secret exorbitant sales
commissions to brokers of up to 50 percent of the proceeds obtained from
investors. These fraudulent private placements allegedly included stock of: (a)
Ranch*1, a grilled chicken sandwich fast-food chain of restaurants operating
throughout the New York City area and elsewhere; (b) World Gourmet Soups, Inc.,
d/b/a "The Manhattan Soup Man," a company that operates and franchises fast food
restaurants and kiosks and sells prepared soups to
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the restaurant industry; (1) and (c) Jackpot Entertainment Magazine, Inc., a
Brooklyn-based company in the business of publishing a magazine about the casino
industry. The defendants charged in this scheme include SEBASTIAN RAMETTA, a/k/a
"Sebbie," the President and Chief Executive Officer of Ranch*1, both of whom
allegedly are associates of the Colombo Crime Family.(2)
INDICTMENTS AND COMPLAINTS
CHARGING INTERNET-RELATED FRAUD
The Indictments and Complaints unsealed today allege various frauds
involving the use of Internet-related companies to commit fraud, or the use of
the Internet to promote the securities of other companies whose stock was being
manipulated. All of these cases arise out of the undercover investigation
because the perpetrators sought to use DMN Capital in their illegal schemes.
1. WAMEX Holdings, Inc.: WAMEX Holdings Inc. is a Brooklyn-based
corporation purportedly in the business of developing an alternative trading
system ("ATS") for securities, and whose common stock trades on the OTC Bulletin
Board. In United States v. Cushing, et al., 00 Mag. 1118, the three defendants
charged are
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(1) In a Complaint unsealed today, United States v. LaBarbara, 00 Mag. 1121,
Stephen LaBarbara, a stock broker at The Agean Group, New Jersey broker-dealer,
is alleged to have received, from November 1999 to January 2000, secret
undisclosed commissions in connection with his sales of stock in the private
placement of World Gourmet Soups, Inc.
(2) In another Indictment unsealed today, United States v. Trippe, et al., 00
Cr. 588, six other defendants were charged with securities fraud in connection
with two private placement offerings by Jackpot Entertainment. Those six
defendants are: EDWARD TRIPPE, Jackpot's Chief Financial Officer and Secretary;
BRUCE BECKER, Jackpot's President and Publisher; ANDREW ADAMS, Jackpot's Vice
President and Chief Executive Officer; SAMUEL WARD, a public accountant; BRYAN
MCGUIRE, a registered representative; and PATRICIA OPPITO, a registered
representative employed by Wolff Investment Group, Inc. The Indictment alleges
that the defendants paid secret undisclosed compensation equal to 50 percent of
the funds raised to brokers who sold Jackpot private placement stock to public
investors. The Indictment further alleges that WARD falsified Jackpot's
financial statements by concealing
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MITCHELL CUSHING, WAMEX's Chief Executive Officer; RUSSELL CHIMENTI, WAMEX's
Chief Administrative Officer; and ROGER DETRANO, a New York-based stock
promoter, were charged with conspiracy to commit securities fraud from December
1999 to June 2000. According to the Complaint, the scheme involved the issuance
of false press releases stating that ATS would be available by July 4, 2000,
misrepresentations in SEC filings regarding the source and nature of funding
that WAMEX had obtained, and the payment of secret exorbitant commissions to
brokers who sold WAMEX stock to public customers.
The price of WAMEX stock increased from approximately $1.12 per share
on December 9, 1999, to approximately $19.50 per share on February 28, 2000. As
of June 12, 2000, WAMEX had a market capitalization of over $184 million. In
connection with today's actions, the SEC imposed a trading halt on WAMEX stock.
2. E-Pawn.com: E-Pawn.com is a Florida-based company that describes
itself as "a multifaceted Internet portal, website designer and e-commerce
software developer," and whose stock trades on the OTC Bulletin Board. In United
States v. Greyling, et al., 00 Cr. 631, three defendants were charged with
securities fraud in connection with an alleged scheme, from January 2000 to June
2000, to pay 1.0 million shares of E-Pawn to be used to bribe brokers to create
retail demand for E-Pawn stock, and to use Internet sites and bulk e-mail to
tout E-Pawn to the public. Charged in this scheme are LESLIE GREYLING, an
alleged undisclosed principal of E-Pawn; ELI LIEBOWITZ, the President, Chief
Financial Officer and a Director of E-Pawn; and
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the secret commissions, and by issuing unqualified audit opinions that falsely
certified that he had examined Jackpot's financial statements in accordance with
generally accepted auditing standards.
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TINA ALEXANDER, a Texas stock promoter. As of June 12, 2000, E-Pawn had a market
capitalization of approximately $198 million. In connection with today's
actions, the SEC imposed a trading halt on E-Pawn stock.
3. FinancialWeb.com: FinancialWeb.com ("FWEB") is a Florida-based
company purportedly in the business of creating and operating,
investment-related Internet services, whose stock trades on the OTC Bulletin
Board. In United States v. Lake, et al., 00 Cr. 651, it is alleged that, from
February 2000 to June 2000, GLENN B. LAKEN, a hedge fund manager and commodities
trader on the Chicago Mercantile Exchange, held a large position in FWEB stock,
and enlisted others to fraudulently inflate the price of FWEB stock, and to
conceal his identity as the seller. To effect this scheme, LAKEN employed the
services of DAVID W. BRUNO and ADAM KRIFTCHER, who allegedly controlled a number
of Internet websites, including stockregister.com; bullstrategies.com;
wallstreetmarquee.com; atthebell.com; and stockplayground.com, which they
allegedly used to conduct coordinated Internet promotions of the stock of
publicly-traded companies. Also allegedly involved was MICHAEL PORRICELLI,
President of Core Financial, LLC, who controlled a number of Internet websites
that he allegedly used to conduct coordinated promotions of the stock of
publicly-traded companies. These websites included otcbbstockwatch.com;
redalert.com; subway.com; americananalyst.com; powerstocks.com and
fortuneinvestments.com. LAKEN also allegedly agreed to use the services of
LIONEL REIFLER, President of Fortune Investments, Inc., who allegedly offered a
fraudulent newsletter program used to generate high trading volume in OTC
securities at inflated prices. According to the Indictment, it was agreed that
BRUNO, KRIFTCHER and PORRICELLI would feature FWEB on
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websites that they controlled, would promote FWEB by sending bulk E-mails to
their website subscribers, and that BRUNO and KRIFTCHER would prepare and post
on their websites promotional materials describing FWEB's business and its
common stock. Laken allegedly agreed to pay BRUNO, KRIFTCHER, REIFLER, and
PORRICELLI for their promotional efforts with FWEB stock, and to conceal that
fact, as well as LAKEN's involvement in those efforts. Also named in the
Indictment is PETER J. WORRELL, a stock broker at and principal of Royal Hutton
Securities Corp., who is charged with bribing brokers at Royal Hutton to create
retail demand for FWEB stock.
4. SearchHispanic.com and Gtrade Network, Inc.: SearchHispanic.com is a
Plainview, New York-based company engaged in creating and maintaining an
Internet website of interest to persons of Hispanic descent. GTrade Network,
Inc. ("GTrade") is a Great River, New York-based company that held itself out as
an incubator of Internet-related and e-commerce businesses. GTrade common stock
trades on the OTC Bulletin Board, and SearchHispanic.com has common stock that
is issued, but has not publicly traded. In United States v. Downing, et al., 00
Cr. 555, three persons were charged with a fraudulent scheme, from March 2000 to
June 2000, in which SearchHispanic.com would go public by "reverse merging" into
GTrade, a publicly-traded company, and then the defendants allegedly would
artificially inflate the price of the common stock of the merged entity.
According to the Indictment, JAMES DOWNING, the Chief Executive Officer and
controlling shareholder of SearchHispanic.com, met with alleged members and
associates of organized crime, including SALVATORE R. PIAZZA, a/l/a/ "Sal", and
agreed that to effect the scheme, approximately 45 percent of the stock in the
post-merger entity would be deposited into secret offshore nominee accounts that
DOWNING would
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maintain an interest in, and that he would use to fund the payment of secret
bribes to brokers who would generate trading volume in SearchHispanic.com stock.
DOWNING would also allegedly sell his personal holdings of stock to enrich
himself and others. As part of the scheme, SAMUEL WARD and DANIEL DRUCKER, both
certified public accountants, allegedly agreed to falsify the financial
statements of SearchHispanic. com and GTrade, and to issue unqualified audit
opinions certifying that the financial statements of the companies were
accurate.
5. Cybersentry, Inc.: Cybersentry, Inc. was a Florida-based
communications software company that specialized in facilitating secure
communications on the Internet. Cybersentry common stock previously traded on
the OTC Bulletin Board, and in May 2000 commenced trading on the American Stock
Exchange. Two Indictments charging fraud in connection with Cybersentry were
unsealed today--United States v. Wager, et al, 00 Cr. 629, and United States v.
Brigandi, et al., 00 Cr. 630. According to the Indictments, NEIL WAGER, an
individual residing in Boca Raton, Florida, and BRUCE BRIGANDI, an individual
residing in Roslyn Heights, New York, each allegedly acquired a large block of
Cybersentry common stock. According to the Wager Indictment, shortly after
acquiring the shares, WAGER agreed to pay undisclosed bribes to KARL FREDERICK
GRAFF, a stock broker employed by Equitrade Securities Corp., in exchange for
efforts by GRAFF to sell WAGER's stock to GRAFF's retail clients. According to
the Brigandi Indictment, shortly after acquiring his shares, BRIGANDI
participated in an illegal scheme in which he agreed to pay bribes to brokers in
exchange for their efforts in generating retail demand for Cybersentry common
stock. It is alleged that these frauds occurred from March 2000 to June 2000.
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6. Bookdigital.com. Bookdigital.com was a New York-based corporation
that held itself out as a development-stage company in the business of creating
and operating reference sites on the Internet. In a Complaint captioned United
States v. Vahab, 00 Mag. 1120, RAY VAHAB, the Chairman of the Board and Chief
Executive Officer of Bookdigital.com, allegedly controlled a vast majority of
the Bookdigital.com stock, and was also the owner of First Madison Securities, a
New York-based broker-dealer. The Complaint alleges that from April 2000 to June
2000, VAHAB embarked on a scheme in which he would first raise capital by paying
bribes to brokers to sell Bookdigital.com private placement stock, and then
manipulate the publicly-available stock by "reverse merging" Bookdigital.com
into a publicly-traded shell corporation.
7-9. Exchange Online, Inc., Amerivest, Online, Inc., and Franklin
Services Corp.: Each of these three companies purported to be involved in
Internet-related businesses, and were allegedly the subject of sham private
placement offerings as set forth below in United States v. Tavolacci, et al., 00
Cr. 554.
FRAUD AND MANIPULATION
OF PUBLICLY TRADED SECURITIES
Certain of the Indictments and Complaints unsealed today charge fraud
in connection with the markets for publicly-traded securities.
1. In United States v. Dacunto, et al., 00 Cr. 620, 26 defendants were
charged with manipulation of four of the publicly-traded securities identified
in the Lino Indictment as being the subject of manipulation by the RICO
Enterprise--Spaceplex, Reclaim, Bearchport, and International Nursing. The
defendants named in the Dacunto Indictment, which covers the period from
December 1994 to late 1996, include persons
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who served as brokers at Monitor Investment Group, the broker-dealer controlled
by the RICO Enterprise that was used to manipulate the markets in the
above-mentioned publicly-traded securities. The defendants named in the Dacunto
Indictment include the following persons, who were either promoters, managers,
or licensed or unlicensed brokers: ROBERT J. DACUNTO; MICHAEL P. DACUNTO; JOSEPH
P. MEDURI; VINCENT A. PADULO, JR..; VITO G. PADULO, JOHN BRUZZESE; SALVATORE F.
RUGGIERO; PATRICK GIGLIO, a/k/a "Patty"; CHESTER L. CHICOSKY; LAWRENCE M.
CHOINIERE; WILLIAM P. BURKE; KEVIN RADIGAN; GEORGE F. BISNOFF; DAMIEN R.
DOUGLAS; CRAIG P. MCGUINN, II; MARC L. WEISSMAN; MARK M. DANIELI; IRVING
STITSKY; PAUL L. BURTON; KENNETH J. FUINA; MARC I. BURTON; EMMANUEL G. GENNUSO;
and FACUNDO PONCE, a/k/a/ "Frank".
2. United States v. Wolfson, et al., 00 Cr. 628, charges seven persons
in a scheme, occurring from 1988 to May 2000, to manipulate the stock of five
companies whose securities traded on the OTC Bulletin Board or the NASDAQ
Small-Cap Market. They include: (a) ATR Industries, Inc., a Ft. Lauderdale
company in the business of operating home cleaning services; (b) Rollerball
International, Inc., a Delaware corporation that manufactured inline roller
skates; (c) Learners World, Inc., a New York corporation that operated learning
and day care centers for children; (d) Healthwatch, Inc., a Minnesota
corporation that manufactured medical products; and (e) Hytk Industries, Inc. a
Nevada corporation that produced and transported natural gas.
The Defendants charged in this case are: ALLEN WOLFSON, a Salt Lake
City-based stock promoter who was a consultant to Cyberamerica Corp., a company
that
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purported to be in the business of providing financial consulting services to
distressed public companies; MICHAEL GRECCO, a New York-based stock promoter;
JOHN MICHAEL BLACK, a stock broker and principal of Grady and Hatch and Co., a
Manhattan broker-dealer; SPIRO LAZARETOS, a broker who worked at Caribbean
Securities, a New York broker-dealer, and at Grady and Hatch; ROBERT BALSAMO, a
stock promoter who worked at Wolff Investment Group and Delta Asset Manager,
both New York broker-dealers; VLADIMIR CARVALLO, a stock broker affiliated with
Morgan Grant Capital Corp., a New York broker-dealer, and with Delta Asset
Management; and KONSTANTINOS DINO SONITIS, a stockbroker at Bell Investment
Group, a New York-based broker-dealer.
According to the Indictment, WOLFSON allegedly received large amounts
of stock in the companies, either free-of-charge or at substantial discounts,
and then allegedly agreed to pay GRECCO a bribe equal to between 40 and 70
percent of the value of the retail sales of WOLFSON's stock as generated by
stock brokers under GRECCO's control. To effect the scheme, GRECCO allegedly
recruited the other defendants to sell WOLFSON's stock in exchange for bribes.
WOLFSON also allegedly instructed his coconspirators that his stock be "crossed
with," or purchased by, the retail customers, which he accomplished by directing
the brokers to direct their trades to certain market makers that were in league
with WOLFSON.
3. United States v. Gasparik, et al., 00 Cr. 650, charges fraud, from
April 2000 to June 2000, in connection with the stock of Harbour Intermodal
Ltd., a development-stage company that planned to provide local freight shipping
among rail, truck and water transportation companies in the New York harbor
area, and that traded on
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<PAGE> 18
the OTC Bulletin Board. The Indictment charges that, as of April 2000, MICHAEL
GASPARIK, Harbour Intermodal's Chief Executive and Chairman of the Board, owned
87 percent of Harbour's common stock. GASPARIK allegedly sought the assistance
of Michael Grecco, a stock promoter, and agreed to give Grecco large amounts of
Harbour stock as substantial discounts, if Grecco and others would inflate the
share price of Harbour stock through fraudulent Internet promotions and by
paying bribes to brokers in return for selling Harbour stock to their clients.
In order to facilitate the scheme, David W. Bruno and Adam Kriftcher allegedly
agreed to feature Harbour on Internet websites under their common control in
exchange for payments of Harbour stock. In addition, GASPARIK allegedly
recruited ROGER FIDLER, an attorney, to prepare SEC filings that were false
because, among other things, they allegedly concealed the agreement to pay
bribes to brokers in return for purchases by their customers of Harbour stock,
and allegedly concealed GASPARIK's control of a trust used to conceal the
payment to Grecco of large amounts of Harbour stock.
4. United States v. Lugo, 00 Mag. 1119, is a Complaint charging fraud,
from May 1999 to June 1999, in connection with the securities issued by Premier
Classic Art, Inc. ("PART"), and which traded on the OTC Bulletin Board. JOSEPH
LUGO, the defendant, was in control of PART's management, and controlled a large
block of its stock. According to the Complaint, LUGO allegedly met with members
and associates of organized crime, including Robert Lino, a/k/a/ "Little
Robert," and devised a scheme in which he would obtain a falsely inflated, $10
million appraisal for certain assets, i.e., original animation drawings, and
then "reverse merge" a company holding those assets into PART, a large amount of
the stock of which was controlled by LUGO. In fact,
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<PAGE> 19
LUGO allegedly did conduct a "reverse merger," and obtained the false appraisal
which valued the assets at $12 million to $20 million.
FRAUD IN THE SALE
OF PRIVATELY PLACED SECURITIES
Other of the Indictments and Complaints unsealed today charge fraud in
connection with the private placement of securities. Many of these schemes
involve "boiler room" sales tactics, and the payment of secret extraordinary
commissions to brokers in exchange for their efforts in selling the stock, which
commissions are concealed from the investors.
1. United States v. Tavolacci, et al., 00 Cr. 554, charges 18
defendants in connection with five fraudulent private placement stock offerings
that extended from April 1997 to May 1999. According to the Indictment, groups
of non-registered stock brokers, or "cold callers," using scripts replete with
false and fraudulent information, made unsolicited "cold" calls to potential
investors to induce them to invest in the sham private placements. In selling
the stock, the cold callers allegedly: (a) concealed the fact that they were
receiving extraordinary compensation equal to approximately thirty percent of
the value of the funds they raised from investors; (b) used false names when
speaking to investors; (c) misrepresented that investor funds would be used by
the issuer for business purposes, when in fact more than 50 percent of the money
raised in each private placement was used to pay brokers and unlawfully enrich
the principals of the issuer; (d) misrepresented that each issuer would conduct
an initial public offering ("IPO") of its common stock shortly after the
investors' purchase of common stock in the private placement; and (e)
misrepresented that the issuers were successful businesses.
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<PAGE> 20
The issuers involved in this alleged scheme were the following: (a)
First Fidelity Financial Co., purportedly an investment banking firm in
Manhattan; (b) Exchange.Online, purportedly an online financial and business
"cybermall" located in Delaware; (c) First Fidelity Equities, purportedly a
Manhattan brokerage firm; (d) Amerivest.Online, purportedly a Manhattan business
that designed customer web sites; and (e) First Commerce Corp., purportedly a
Manhattan investment adviser firm. Among the defendants indicted were: SALVATORE
TAVOLACCI, executive vice-president of First Fidelity Financial Corp. and First
Fidelity Investment Management ("FFIM"); KARL DONOVAN, Vice President of
Exchange Online; FREDERICK WALL, President, Treasurer and Secretary of First
Fidelity Equities; DEREK SHAPIRO, a/k/a "David Shapiro," an officer of First
Fidelity Equities; AARON SANDSTROM, Vice-President of Amerivest; and DONALD
BROOKS, president of and secretary of First Commerce. Also indicted were 12
persons who worked as cold-callers.
2. United States v. Torregrossa, et al., 00 Cr. 648, charges two
defendants in connection with a fraudulent private placement stock offering by
Franklin Services Corp. which held itself out as an investment banking, real
estate, and media firm that intended to service clients via the World Wide Web.
According to the Indictment, between February 1999 through June 2000, MARK
TORREGROSSA, President and Chief Executive Officer of Franklin Services, and
JAMES MONTES, an unlicensed broker, fraudulently sold Franklin Services stock by
fraudulent means, including: (a) paying secret extraordinary compensation to
brokers to sell the stock, while telling investors that their funds would be
used for business purposes; (b) representing that a Franklin Services IPO would
occur shortly after the investors purchased private placement stock;
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<PAGE> 21
and (c) representing that Franklin Services would soon be acquired by
Amazon.com, and was planning to acquire Circuit City and Toy R Us.
3. United States v. Zavats, et al. 00 Cr. 247, charges eight defendants
in connection with an alleged fraudulent private placement stock offering that
extended over a two-year period from 1996 to 1998 and involved three companies:
(i) Traveler's Infocenter, which represented itself to be a New York,
development-stage company involved in providing travel-related information; (ii)
Diagnostic Professional Imaging Services, which represented itself to be a
Brooklyn-based, development-stage company that planned to provide MRI services;
and (iii) Nationwide, which represented itself to be a Brooklyn-based,
development stage medical supply company. The scheme to defraud in connection
with all three private placements involved false representations to investors
that the companies had promising business prospects, that all investor funds
would be used for business purposes, and the use of phony names by brokers
selling the private placement stock.
Among the defendants indicted were the following: MARK HIMMELBERGER,
Traveler's Infocenter's President and Treasurer, JUSTIN MARVUL, a/k/a "Eric
Feldman," Traveler's Infocenter's Vice President and Secretary and the Treasurer
of Diagnostic; WARAT ZAYATS; the Vice President and Secretary of Nationwide who
sold Traveler's securities; GREGORY LEVIN, the President and Treasurer of
Nationwide who sold Traveler's securities; MICHAEL DANILOVICH, Diagnostic's
President and Secretary; HARVEY OSHER, a/k/a "Harvery Cohen"; and JAMES
GABERKORN and VADIM SHAPIRO, registered representatives who worked at Hornblower
and Weeks, a broker-dealer, and sold Diagnostic private placement stock.
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<PAGE> 22
4. United States v. Gladstone, et. al., 00 Cr. 652, charges four
defendants with fraud in connection with the private placement of stock issued
by Ivy Entertainment.com, Inc. a marketing and distribution company specializing
in the entertainment, hospitality, financial and technology businesses. The
defendants include: RICHARD GLADSTONE, Ivy's President; HOWARD HELFANT, Ivy's
Executive Vice President; GUS GELMAN, who recruited brokers to sell Ivy
securities, and ROBERT WADE, who sold Ivy securities. According to the
Indictment, from May 1999 to October 1999, the defendants, in order to sell Ivy
securities, agreed to pay exorbitant sales commissions to brokers, and to
conceal those payments from investors.
5. United States v. Amato, et al., 00 Mag 1109, charges three
defendants with securities fraud, from 1998 to June 2000, in connection with the
private placement of stock of Future Fitness, Ltd., a company that operated
health clubs in the New York City area. The defendants include: RENE ARMANDO
DEPERALTA, JOHN AMATO, a/k/a "Flames," the Chief Operating Officer of Future
Fitness, and FRANK ROTELLA, the Chief Executive Officer of Future Fitness. The
scheme allegedly involved the payment of secret bribes equal to approximately 40
percent of the value of Future Fitness common stock in return for brokers
selling the stock to unsuspecting investors, and falsely telling investors that
the proceeds of the private placement would be used in Future Fitness' business.
6. United States v. Yilmaz, et al., 00 Cr. 248, charges three
defendants with securities fraud, from February 1998 to August 1998, in
connection with a private placement of stock of Alliance Technology, an
information technology services company located in Manhattan. The Complaint
names as defendants HAYRI YILMAZ, Alliance's
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<PAGE> 23
President and Chief Executive Officer, and KENNETH JEFFERSON and MERRICK C.
SMITH, two person hired by Alliance to recruit investors to purchase Alliance
stock. The scheme allegedly involved falsely telling investors that an IPO for
Alliance's stock was close at hand, paying secret bribes to brokers in return
for their efforts in selling Alliance stock to unsuspecting investors, and
telling investors that the proceeds of the private placement would be used in
Alliance's business.
ADDITIONAL INFORMATION
In connection with today's arrest, search warrants were executed at the
following locations: (a) the offices of DMN Capital at 5 Hanover Square in
Manhattan; (b) offices of the Detectives' Endowment Association; (c) the
residence of STEPHEN GARDELL in Staten Island, New York; (d) residence of JAMES
S. LABATE, a/k/a "Jimmy," in Staten Island, New York; (e) offices of ALLEN
WOLFSON and Cyberamerica in Salt Lake City, Utah; and (f) offices of GENE
PHILLIPS and A. CAL ROSSI at Basic Capital Management, in Dallas, Texas.
Simultaneously with today's announcement, the United States Securities
and Commission announced the filing of three administrative proceedings alleging
fraud-related charges against a total of 41 respondents. These include one
administrative proceeding against 33 persons arising out of the private
placement fraud at Monitor Investment Group; one against seven persons arising
out of the conduct alleged in United States v. Wolfson, et al.; and one against
WILLIAM STEPHENS. The SEC further announced that it has imposed halts in trading
on the OTC Bulletin Board of securities issued by Wamex Holdings Inc., and
E-Pawn, Inc.
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<PAGE> 24
Previously, NASD Regulation filed a complaint against 18 persons and
Monitor Investment Group for fraud-related activities arising out of Monitor's
activities with respect to Accessible Software, Inc. All defendants were fined
and suspended and/or barred from associating with an NASD member.
Ms. WHITE praised the efforts of all of the law enforcement agencies
involved, and particularly commended the outstanding investigative efforts of
the FBI. Ms. WHITE also thanked the United States Securities and Exchange
Commission for its assistance, and the Criminal Prosecution Assistance Group of
NASD Regulation, Inc. for its help.
Assistant United State Attorneys PATRICK J. SMITH, DAVID C. ESSEKS,
CHRISTOPHER J. CLARK, STEFANIE B. ISSER, MYLAN L. DENERSTEIN, and Special
Assistant United States Attorney JASON SABOT are in charge of the prosecutions.
The charges contained in the Indictments and Complaints are merely
accusation, and the defendants are presumed innocent unless and until proven
guilty.
The names, date of birth, area of residence, charges and maximum
penalty per charge for each of the defendants is set forth on the attached
chart.
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<PAGE> 25
<TABLE>
<CAPTION>
MAXIMUM INDICTMENT
TYPES OF PENALTY PER OR
DEFENDANT DOB RESIDENCE CHARGES CHARGE COMPLAINT
--------------------------- -------- ------------------ ------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
1 AMATO, JOHN, a/k/a "Flames" 01/15/73 Elizabeth, NJ SF 10 AMATO
2 ROTELLA, FRANK 03/07/62 Middletown, NJ SF 10 AMATO
3 DEPERALTA, RENE ARMANDO 06/10/73 Staten Island, NY SF 10 AMATO
4 BRIGANDI, BRUCE 01/22/55 Roslyn Heights, NY SF 10 BRIGANDI
5 CUSHING, MITCHELL 05/12/62 New York, NY C 5 CUSHING
6 CHIMENTI, RUSSELL 02/09/71 Staten Island, NY C 5 CUSHING
7 DETRANO, ROGER 10/17/44 Maspeth, NY C 5 CUSHING
8 HIDALGO, ANTHONY 11/01/77 Brooklyn, NY SF 10 CUSHING
9 DACUNTO, ROBERT J. 06/24/81 Staten Island, NY C, SF 5, 10 DACUNTO
10 DACUNTO, MICHAEL P. 01/10/74 Pittsburgh, PA C, SF 5, 10 DACUNTO
11 MEDURI, JOSEPH P. 08/23/70 Staten Island, NY C, SF 5, 10 DACUNTO
12 PADULO, JR., VINCENT A. 11/09/55 New York, NY C, SF 5, 10 DACUNTO
13 PADULO, VITO G. 03/15/62 New York, NY C, SF 5, 10 DACUNTO
14 BRUZZESE, JOHN 07/25/70 Manalapan, NJ C, SF 5, 10 DACUNTO
15 RUGGIERO, SALVATORE F. 01/08/72 Marlboro, NJ C, SF 5, 10 DACUNTO
16 GIGLIO, PATRICK, a/k/a "Patty" 10/03/62 Staten Island, NY C, SF 5, 10 DACUNTO
17 STITSKY, IRVING 08/11/54 Brookville, NY C, SF 5, 10 DACUNTO
18 BURTON, PAUL L. 05/11/62 C, SF 5, 10 DACUNTO
19 BURTON, MARK I. 11/21/59 Melville, NY C, SF 5, 10 DACUNTO
20 FUINA, KENNETH J. 06/22/50 White Plains, NY C, SF 5, 10 DACUNTO
21 GENNUSO, EMMANUEL G. 01/11/47 Brooklyn, NY C, SF 5, 10 DACUNTO
22 MCGUINN, II, CRAIG P. 03/27/67 Brooklyn, NY C, SF 5, 10 DACUNTO
23 WEISSMAN, MARC L. 03/01/67 New York, NY C, SF 5, 10 DACUNTO
24 PONCE, FACUNDO, a/k/a "Frank" 06/29/70 Williston Park, NY C, SF 5, 10 DACUNTO
25 DINOTA, JR., ANTHONY P. 11/03/85 New Hyde Park, NY C, SF 5, 10 DACUNTO
26 RADIGAN, KEVIN P. 02/15/68 New York, NY C, SF 5, 10 DACUNTO
27 CASO, MICHAEL 08/30/60 Brooklyn, NY C, SF 5, 10 DACUNTO
28 CATALANO, JR., JOHN 12/23/67 Brooklyn, NY C, SF 5, 10 DACUNTO
29 BURKE, WILLIAM P. 01/01/63 Lattingtown, NY C, SF 5, 10 DACUNTO
30 CHICOSKY, CHESTER L. 04/02/63 Fairfield, CT C, SF 5, 10 DACUNTO
31 CHOINIERE, LAWRENCE M. 06/20/49 Williamsburg, VA C, SF 5, 10 DACUNTO
32 DOUGLAS, DAMIEN R. 08/19/68 Jamaica, NY C, SF 5, 10 DACUNTO
33 BISNOFF, GEORGE P. 01/08/61 Roslyn, NY C, SF 5, 10 DACUNTO
34 DANIEL, MARK M. 10/04/60 New York, NY C, SF 5, 10 DACUNTO
35 DOWNING, JAMES 01/30/63 Amityville, NY C 5 DOWNING
36 WARD, SAMUEL 03/12/32 New York, NY C 5 DOWNING
37 DRUCKER, DANIEL 03/15/63 New York, NY C 5 DOWNING
38 GASPARIK, MICHAEL T. 07/07/24 Ridgewood, NJ C 5 GASPARIK
39 FIDLER, ROGER L. 01/16/51 Ridgewood, NJ C 5 GASPARIK
40 GREYLING, LESLIE 05/14/52 London, England C; SF; WF 5, 10, 5 GREYLING
41 LIEBOWITZ, ELI 09/01/43 Englewood, NJ C; SF; WF 5, 10, 5 GREYLING
42 ALEXANDER, TINA 02/15/66 Houston, TX C; SF; WF 5, 10, 5 GREYLING
43 GLADSTONE, RICHARD 08/30/55 Boca Raton, FL C; SF; WF 5, 10, 5 GLADSTONE
44 HELFANT, HOWARD 06/03/56 Boca Raton, FL C; SF; WF 5, 10, 5 GLADSTONE
45 GELMAN, GUS 10/27/66 Atlanta, GA C; SF; WF 5, 10, 5 GLADSTONE
46 WADE, ROBERT C; SF; WF 5, 10, 5 GLADSTONE
47 LABARBARA, STEPHEN 09/20/64 Howell, NJ SF 10 LABARBARA
48 LAKEN, GLENN B. 02/20/54 New York, NY C; SF; WF 5, 10, 5 LAKEN
49 BRUNO, DAVID W. 08/15/69 Patchogue, NY C; SF; WF 5, 10, 5 LAKEN
50 KRIFTCHER, ADAM 05/28/60 Valley Stream, NY C; SF; WF 5, 10, 5 LAKEN
51 PORRICELI, MICHAEL 12/03/66 Denver, CO C; SF; WF 5, 10, 5 LAKEN
52 REIFLER, LIONEL 03/24/39 Boca Raton, FL C; SF; WF 5, 10, 5 LAKEN
</TABLE>
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<PAGE> 26
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
53. WORRELL, PETER J. 10/06/72 Woodbury, NY C; SF; WF 5, 10, 5 LAKEN
54. LUGO, JOSEPH 05/23/44 Fords, NJ C 5 LUGO
55. LINO, ROBERT A., a/k/a "Little 08/30/66 Brooklyn, NY R; RC; 20, 20, 5, LINO
Robert" C;SF;MLC;WF;IK 10, 20, 5, 3
56. LABATE, JAMES S., a/k/a "Jimmy" 04/25/55 Staten Island, NY R; RC; 20, 20, 5, LINO
C;SF;MLC;WF;IK 10, 20, 5, 3
57. PERSICO, FRANK A., a/k/a "Frankie" 02/07/63 Staten Island, NY R; RC; C; 20, 20, 5, LINO
SF; WF 10, 5
58. STROPOLI, ANTHONY P. 01/07/63 Old Bridge, NJ R; RC; SF; 20, 20, 10, LINO
MLC 20
59. PIAZZA, SALVATORE R., a/k/a "Sal" 09/15/51 Howard Beach, NY R; RC; 20, 20, 5, LINO
C;SF;MLC;WF;IK 10, 20, 5, 3
60. GARDELL, STEPHEN E. 05/24/47 Staten Island, NY R; RC; WF 20, 20, 3 LINO
61. CIMINO, CARY F. 09/17/60 New York, NY R; RC; C; 20, 20, 5, LINO
SF; MLC; WT 10, 20, 10
62. RAMETTA, SEBASTIAN, a/k/a "Sebbie" 09/09/65 Staten Island, NY R; RC; SF 20; 20; 10 LINO
63. CHICKARA, JAMES. F. 10/13/54 Holmdel, NJ R; RC; SF 20; 20; 10 LINO
64. DEMATTEO, RALPH, a/k/a "Ralphie" 06/16/55 Staten Island, NY MLC 20 LINO
65. GALLO, ROBERT P., a/k/a "Bobby" 08/31/58 Freehold, NJ R; RC; C; 20; 20; 5; LINO
SF; MLC 10; 20
66. GRECCO, MICHAEL T. 05/25/60 Staten Island, NY R; RC; SF; 20; 20; 10; LINO
MLC 20
67. BLACK, JR., JOHN M. 04/23/58 Jamesburg, NJ R; RC; WF; IK 20;20;5;3 LINO
68. CALVELLO, ANGELO, a/k/a "Tony" 05/26/40 Mohegan Lake, NY R; RC; C; 20; 20; 5; LINO
SF; IK 10; 3
69. MANN, JOSEPH A., a/k/a "Andy" 01/12/38 New York, NY R; RC; C; 20; 20; 5; LINO
SF; WF; IK 10; 5; 3
70. STEPHENS, WILLIAM M. a/k/a "Bill" 01/31/52 Mill Valley, CA R; RC; C; 20; 20; 5; LINO
WF; IK 5; 3
71. LAKEN, GLENN B. 02/20/54 New York, NY R; RC; C; 20; 20; 5; LINO
WF; IK 5; 3
72. PHILLIPS, GENE 10/17/37 Dallas, TX R; RC; C; 20; 20; 5; LINO
WF; IK 5; 3
73. ROSSI, A. CAL 08/13/36 Dallas, TX R; RC; C; 20; 20; 5; LINO
WF; IK 5; 3
74. LANGELLA, VINCENT G., a/k/a "Vinny" 12/30/61 Staten Island, NY R; RC; C; SF 20; 20; 5; 10 LINO
75. PALLA, WILLIAM F. 05/14/52 New York, NY R; RC 20; 20 LINO
76. NEJAIME, TODD M. 02/14/66 New York, NY R; RC; SF; 20; 20; 10; LINO
MLC 20
77. DAPUZZO, STEVEN J. 12/02/69 Delray Beach, FL SF 10 LINO
78. RICOTTONE, CHARLES 09/01/57 Brooklyn, NY EXT 20 RICOTTONE
79. TAVOLACCI, SALVATORE 08/11/72 Staten Island, NY C; SF; WF 5; 10; 5 TAVALACCI
80. DONOVAN, KARL 05/28/72 Flushing, NY C; WF; WF 5; 10; 5 TAVALACCI
81. WALL, FREDERICK 04/14/58 Elmhurst, NY C; SF 5; 10 TAVALACCI
82. SHAPIRO, DEREK, a/k/a "David 06/30/77 New York, NY C; SF 5; 10 TAVALACCI
Shapiro"
83. SANDSTROM, AARON 11/02/77 Huntington Station, C; SF 5; 10 TAVALACCI
NY
84. BROOKS, DONALD 05/03/66 New York, NY C; SF 5; 10 TAVALACCI
85. FERLISI, RONALD 12/27/74 Staten Island, NY C; SF 5; 10 TAVALACCI
86. TELMANY, EDWARD 04/05/75 Staten Island, NY C; SF; WF 5; 10; 5 TAVALACCI
87. SANDSTROM, DANIEL 03/17/71 Ridgewood, NY C; SF 5; 10 TAVALACCI
</TABLE>
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<PAGE> 27
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
88. SANGEMINO, DANIEL 07/29/75 Farmingdale, NY C; SF; WF 5; 10; 5 TAVALACCI
89. LABELLA, JAY 05/31/79 Staten Island, NY C; SF 5; 10 TAVALACCI
90. MONTES, JAMES 01/25/73 Little Neck, NY C; SF 5; 10 TAVALACCI
91. MONTES, MARLIN 11/26/65 Queens, NY C; SF 5; 10 TAVALACCI
92. CRAWFORD, CARLTON, a/k/a "Ross" 11/01/71 Ellenville, NY C; SF 5; 10 TAVALACCI
93. ODENHAL, JOSETTE 11/14/74 Brooklyn, NY C; SF 5; 10 TAVALACCI
94. ALEXANDER, STEVEN 09/19/72 Farmingdale, NY C; SF 5; 10 TAVALACCI
95. MURRAY, GREG 05/01/66 Jersey City, NJ C; SF; WF 5; 10; 5 TAVALACCI
96. WIGGINS, KEITH 12/20/67 Baldwin, NY C; SF 5; 10 TAVALACCI
97. TORREGROSSA, MARK 04/23/73 Middle Village, NY C; SF 5; 10 TORREGROSSA
98. MONTES, JAMES 01/25/73 Little Neck, NY C; SF 5; 10 TORREGROSSA
99. TRIPPE, EDWARD 08/10/65 Brooklyn, NY C; SF; MF 5; 10; 5 TRIPPE
100. BECKER, BRUCE 07/23/68 Staten Island, NY C; SF; MF 5; 10; 5 TRIPPE
101. ADAMS, ANDREW 03/03/51 Brooklyn, NY C; SF; MF 5; 10; 5 TRIPPE
102. WARD, SAMUEL 03/12/32 New York, NY C 5 TRIPPE
103. MCGUIRE, BRYAN 12/21/71 Tappan, NY C 5 TRIPPE
104. OPPITO, PATRICIA 11/09/60 New York, NY C 5 TRIPPE
105. VAHAB, RAY 03/24/48 New York, NY C 5 VAHAB
106. WAGER, NEIL 01/30/44 Garden City, NJ C; SF; WF 5; 10; 5 WAGER
107. GRAFF, KARL FREDERICK 03/22/68 San Diego, CA C; SF; WF 5; 10; 5 WAGER
108. WOLFSON, ALLEN 01/02/46 Salt Lake City, UT C; SF; WF 5; 10; 5 WOLFSON
109. GRECCO, MICHAEL 05/25/60 Staten Island, NY C; SF; WF 5; 10; 5 WOLFSON
110. BLACK, JOHN MICHAEL 04/23/58 Jamesburg, NJ C; SF 5; 10 WOLFSON
111. LAZARETOS, SPIRO 05/01/65 Brooklyn, NY C; SF 5; 10 WOLFSON
112. BALSAMO, ROBERT 04/25/73 Northport, NY C; SF 5; 10 WOLFSON
113. CARVALLO, VLADIMIR 06/29/66 Astoria, NY C; SF 5; 10 WOLFSON
114. SONITIS, KONSTANTINOS DINO 10/08/72 Brooklyn, NY C; SF 5; 10 WOLFSON
115. YILMAZ, HAYRI 04/18/66 Rutherford, NJ C; SF 5; 10 YILMAZ
116. JEFFERSON, KENNETH 09/30/55 Bronx, NY C; SF 5; 10 YILMAZ
117. SMITH, MERRICK C. 05/15/54 Brooklyn, NY C; SF 5; 10 YILMAZ
118. ZAYATS, MARAT, a/k/a "Mark Zayats" 10/21/70 Brooklyn, NY C; SF; MF; 5; 10; 5; ZAYATS
ML; P; WT 20; 5; 10
119. LEVIN, GREGORY 03/09/76 Brooklyn, NY C, SF, MF, WT 5; 10; 5; 10 ZAYATS
120. MARVUL, JUSTIN, a/k/a "Eric 07/28/73 Brooklyn, NY C, SF, MF, 5; 10; 5; ZAYATS
Feidman" ML, WT 20; 10
121. OSHER, HARVEY, a/k/a "Harvey Cohen" 06/10/67 Brooklyn, NY C, ML 5; 20 ZAYATS
122. HIMMELBERGER, MARK 07/05/62 Brooklyn, NY C, SF, MF, ML 5; 10; 5; 20 ZAYATS
123. DANILOVICH, MICHAEL 08/30/73 Brooklyn, NY C, SF, MF, WT 5; 10; 20; 10 ZAYATS
124. GABERKORN, JAMES 05/12/69 Brooklyn, NY C, SF 5; 10 ZAYATS
125. SHAPIRO, VADIM 04/18/71 Baltimore, MD C, SF 5; 10 ZAYATS
</TABLE>
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<PAGE> 28
CHARGE LEGEND
<TABLE>
<S> <C>
C Conspiracy
IK Illegal Kickbacks
EXT Extortion
MF Mail Fraud
ML Money Laundering
MLC Money Laundering Conspiracy
P Perjury
R RICO
RC RICO Conspiracy
SF Securities Fraud
WF Wire Fraud
WT Witness Tampering
</TABLE>
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