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EXHIBIT 99.1
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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UNITED STATES OF AMERICA, :
INDICTMENT
-v- :
00 Cr. ( )
ROBERT A. LINO, :
a/k/a "Little Robert,"
JAMES S. LABATE, :
a/k/a "Jimmy,"
FRANK A. PERSICO, :
a/k/a "Frankie,"
ANTHONY P. STROPOLI, :
SALVATORE R. PIAZZA,
a/k/a "Sal," :
STEPHEN E. GARDELL,
CARY F. CIMINO, :
SEBASTIAN RAMETTA
a/k/a "Sebbie," :
JAMES F. CHICKARA,
RALPH DEMATTEO, :
a/k/a "Ralphie,"
ROBERT P. GALLO, :
a/k/a "Bobby,"
MICHAEL T. GRECCO, :
JOHN M. BLACK, JR.,
ANGELO CALVELLO, :
a/k/a "Tony,"
JOSEPH A. MANN, :
a/k/a "Andy,"
WILLIAM M. STEPHENS, :
a/k/a "Bill,"
GLENN B. LAKEN, :
GENE PHILLIPS,
A. CAL ROSSI, :
VINCENT G. LANGELLA,
a/k/a "Vinny," :
WILLIAM F. PALLA,
TODD M NEJAIME, and :
STEVEN J. DAPUZZO,
:
Defendants.
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RACKETEERING CHARGES
COUNT ONE
Racketeering
The Grand Jury charges:
The Enterprise
At all times relevant to this Indictment, in the Southern District of
New York and elsewhere:
1. DMN Capital Investments, Inc. ("DMN Capital"), held itself out as a
financial advisory firm that provided investment banking and stock promotion
services. DMN Capital first maintained an office at 67 Liberty Street in New
York, New York and later established its office at 5 Hanover Square, New York,
New York.
2. ROBERT A LINO, a/k/a "Little Robert," JAMES S. LABATE, a/k/a
"Jimmy," FRANK A PERSICO, a/k/a "Frankie," ANTHONY P. STROPOLI, SALVATORE R.
PIAZZA, a/k/a "Sal," STEPHEN E. GARDELL, CARY F. CIMINO, SEBASTIAN RAMETTA,
a/k/a "Sebbie," JAMES F. CHICKARA, ROBERT P. GALLO, a/k/a "Bobby," MICHAEL T.
GRECCO, JOHN M. BLACK, JR., ANGELO CALVELLO, a/k/a "Tony," JOSEPH A. MANN, a/k/a
"Andy," WILLIAM M. STEPHENS, a/k/a "Bill," GLENN B. LAKEN, GENE PHILLIPS, A. CAL
ROSSI, VINCENT G. LANGELLA, a/k/a "Vinny," WILLIAM F. PALLA, and TODD M.
NEJAIME, the defendants, and others known and unknown, and DMN Capital, were
members and associates of a criminal organization engaged in securities
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fraud, wire fraud, pension fund fraud, illegal kickbacks to union officials,
extortion, money laundering, bribery, witness tampering and murder solicitation.
3. The organization, including its leadership, its membership, and its
associates, constituted an "enterprise," as that term is defined in Title 18,
United States Code, Section 1961(4), that is, a group of individuals and entity,
DMN Capital, associated in fact, although not a legal entity. At various times
relevant to this Indictment, the enterprise operated in the Southern and Eastern
Districts of New York, the District of New Jersey, the Northern District of
Illinois, the Northern District of Texas, the Northern District of California,
among other locations in the United States and abroad. At all times relevant to
this Indictment, the enterprise was engaged in, and its activities affected,
interstate and foreign commerce.
4. The enterprise charged in this Indictment consisted of individuals,
a number of whom were members and associates were members and associates of
Organized Crime Families of La Cosa Nostra ("LCN Families") in the New York City
area, namely the Bonanno Crime Family, the Colombo Crime Family, the Gambino
Crime Family, the Genovese Crime Family, and the Luchese Crime Family,
associated together with DMN Capital to engage in criminal activities.
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5. The enterprise used its affiliation with various LCN Families to
further the illegal goals of the enterprise. The members and associates of the
enterprise charged in this Indictment were united by their common criminal
interests, regardless of the particular LCN Family, if any, with which a
particular individual was associated.
Purposes of the Enterprise
6. The purposes of the enterprise included the following:
a. Enriching the members and associates of the enterprise
through, among other things, securities fraud, wire fraud, and extortion;
b. Concealing and promoting the enterprise's unlawful
activity by laundering the proceeds of securities fraud and wire fraud; and
c. Preserving, protecting, and augmenting the power and
financial profits of the enterprise through the use of intimidation, threats of
violence, actual violence, intimidation, bribery of public officials,
obstruction of justice, witness tampering and murder solicitation.
Means and Methods of the Enterprise
7. Among the means and methods employed by the members and associates
of the enterprise in the conduct of the enterprise were the following:
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A. Schemes To Defraud Investors
In Publicly Traded Securities
8. The enterprise sought and obtained secret control of large blocks
of free trading securities of publicly traded companies at little or no cost to
the enterprise. The enterprises obtained inexpensive free trading stock by,
among other means, systematically exploiting and violating various rules and
regulations of the United States Securities and Exchange Commission ("SEC")
governing the registration and issuance of securities, and, in certain
instances, entering into illegal agreements with persons in control of public
companies to violate said SEC rules and regulations for the purpose of
conveying inexpensive stock to the enterprise. The enterprise then fraudulently
inflated the market prices of these securities through, among other means, (a)
engaging in prearranged trades that were fraudulently designed to give the
appearance of legitimate market activity; (b) unlawfully stimulating retail
demand for securities by paying secret bribes to stock brokers to cause their
customers to buy and hold securities; and (c) controlling and attempting to
control the available supply of securities. The enterprise then defrauded
investors by selling the securities that the enterprise secretly controlled to
investors in transactions that had been unlawfully motivated by bribes and that
were generally at prices that had been fraudulently inflated by the enterprise.
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9. The following publicly traded companies, among others, entered into
corrupt agreements with the enterprise in furtherance of the enterprise's
schemes to defraud investors:
a. Spaceplex Amusement Centers International Ltd. ("Spaceplex"), a
Nevada corporation that maintained its principal place of business in Great
Neck, New York. Spaceplex common stock was listed on the OTC Bulletin Board, a
regulated quotation service that displayed real-time quotes, last-sale prices,
and volume information in over-the-counter ("OTC") securities.
b. Reclaim Inc. ("Reclaim"), a Delaware corporation that maintained
its principal place of business in Tampa, Florida. Reclaim common stock was
listed on the NASDAQ Small Cap market.
c. Beachport Entertainment Corp. ("Beachport"), a Utah corporation
that maintained its principal place of business in Los Angeles, California.
Beachport common stock was listed on the OTC Bulletin Board.
d. International Nursing Services Inc. ("International Nursing"), a
Colorado corporation that maintained its principal place of business in Denver,
Colorado. International Nursing common stock, preferred stock and warrants were
listed on the NASDAQ Small Cap market.
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e. Leasing Edge Corporation ("Leasing Edge"), a Delaware corporation
that maintained its principal place of business in Las Vegas, Nevada. Leasing
Edge common stock and warrants were listed on the NASDAQ Small Cap Market.
f. Globus International Resources Corp., ("Globus International"), a
Nevada corporation that maintained its principal place of business in New York,
New York. Globus International common stock was listed on the OTC Bulletin
Board.
10. In addition, the enterprise gained secret control of large blocks of
free trading stock of the following issuers and executed schemes of defraud
investors:
a. Innovative Medical Services, ("Innovative Medical"), a California
corporation that maintained its principal place of business in El Cajon,
California. Innovative Medical common stock and warrants were listed on the
NASDAQ Small Cap market.
b. Accessible Software, Inc. ("Accessible Software"), a New Jersey
corporation that maintained its principal place of business in Annandale, New
Jersey. Accessible Software common stock was listed on the OTC Bulletin Board.
11. The enterprise used DMN Capital to, among other things, negotiate and
enter into fraudulent agreements with issuers, maintain secret control of
securities, and funnel illegal payments to stock brokers. DMN Capital, both
directly
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and indirectly, controlled numerous other entities as well as bank and
brokerage accounts for the purpose of achieving the unlawful purposes of the
enterprise.
12. To facilitate it schemes to defraud investors in publicly traded
securities, the enterprise infiltrated and gained secret control of brokerage
firms and branch offices of brokerage firms, including:
a. Monitor Investment Group, Inc., a broker-dealer that was
registered with the SEC that operated branches at 20 Exchange Place, 919 Third
Avenue and 30 Broad Street in New York City. From in or about September 1995 to
in or about June 1996, the enterprise operated Monitor's three New York
branches as "boiler rooms" and employed a host of manipulative sales practices
that facilitated the sale of Beachport, International Nursing, Accessible
Software and other securities (the "House Stocks") to unwitting investors.
Among other fraudulent sales practices at Monitor, the enterprise, through its
members and associates, (i) manipulated the retail sales price of House Stocks
on a daily basis; (ii) paid brokers exorbitant commissions based upon excessive
"spreads" or "mark-ups" that the enterprise controlled through its domination
of the market for the House Stocks; (iii) systematically failed to disclose its
fraudulent mark-ups and exorbitant commissions to its customers; (iv)
prohibited Monitor's brokers from executing sell orders from
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Monitor's customers on House Stocks; (v) paid secret bribes to select brokers
at Monitor; and (vi) employed scores of unlicensed brokers and cold-callers.
b. A branch of Meyers Pollack and Robbins, a broker-dealer registered
with the SEC, located at 30 Broad Street, New York, New York. From in or about
July 1996 to in or about September 1996, the enterprise entered into an
agreement with the principal of Meyers Pollack that permitted its former
Monitor branch at 30 Broad Street to continue operation as a Meyers Pollack
branch. The enterprise used its secret control of the 30 Broad Street branch
of Meyers Pollack to, among other things, defraud investors in the securities
of Innovative Medical and Leasing Edge.
c. Two branches of First Liberty Investment Group, Inc., a broker
dealer registered with the SEC, located at 80 Broad Street and 84 William
Street in New York, New York. The enterprise also exercised significant control
over First Liberty's trading operations. The enterprise used its secret control
at First Liberty to facilitate the scheme to defraud investors in Globus
International.
13. The enterprise also entered into corrupt deals with brokers at other
firms who, in return for secret bribes, agreed to cause their customers to buy
and hold (or "put away") securities. These bribes were paid in the form of cash,
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securities, payments to third-party nominees, as well as securities sold in
rigged transactions at substantial discounts to the then-prevailing market
price. In addition to bribing individual brokers, the enterprise entered into
bribery arrangements to "put away" securities with the principals of branches
of other firms, as well as with persons who controlled "crews" of brokers
acting in concert with respect to a particular security, including the
following:
a. A crew of brokers at William Scott & Company, a
broker-dealer registered with the SEC that was located in Union, New Jersey.
This crew of brokers agreed to be bribed to "put away" Reclaim, International
Nursing, Leasing Edge, and Innovative Medical securities, among others.
b. The principals of the Meyers Pollack branch located at 67
Wall Street who agreed to be bribed to "put away" International Nursing,
Leasing Edge, and Innovative Medical securities, among others.
c. A crew of brokers at Atlantic General Financial Group, a
broker-dealer registered with the SEC that operated a branch at 19 Rector
Street, New York, New York. This crew of brokers agreed to be bribed to "put
away" Spaceplex and Reclaim and later entered in an agreement with the
enterprise to operate Monitor's 20 Exchange Place branch.
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14. In addition to the schemes to defraud investors in Spaceplex,
Reclaim, Beachport, International Nursing, Leasing Edge, Innovative Medical,
Accessible Software and Globus International securities, all of which featured
actual and attempted control and domination of the market for each security,
the enterprise periodically sought illegal profits through its participation
in, and facilitation of, schemes where the illegal conduct was the paying of
bribes to brokers in return for causing their customers to "put away"
securities. The securities of the following companies, among others, were the
subject of broker bribery schemes that the enterprise facilitated:
a. Healthwatch, Inc., a Minnesota corporation, that
maintained its principal place of business in Atlanta, Georgia. Healthwatch
common stock was listed on the NASDAQ Small Cap market. The enterprise
facilitated bribes to brokers at Bell Investment Group, a broker-dealer
registered with the SEC located in New York, New York, in return for "putting
away" Healthwatch stock.
b. GTrade.Network, Inc., ("GTrade"), a Delaware corporation
that maintained its principal place of business in Great River, New York. The
enterprise facilitated bribes to brokers at Bryn Mawr Investment Group, a
broker-dealer registered with the SEC with branch offices in New York, New York
Staten Island, New York, in return for "putting away" GTrade stock.
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B. Extortion, Threats and Intimidation
15. The enterprise used extortion, threats and intimidation to further its
illegal activities in the public securities markets. The enterprise used its LCN
Family backing and affiliation to instill fear in brokers and other market
participants who did business with the enterprise. A principal objective was to
enforce agreements with brokers to "put away" stock in return for bribes.
Brokers who reneged on these agreements were subject to beatings and threats of
beatings. The enterprise used extortionate means to seek repayment of bribes
from brokers and stock promoters who, contrary to the illegal agreement to keep
securities "put away," permitted brokerage firm customers to sell such
securities to the market. Another objective was to enforce discipline among
brokers who worked in brokerage firms controlled and dominated by the
enterprise. Brokers employed at Monitor's 20 Exchange Place branch who failed to
push Monitor's House Stocks on Monitor's customers were subjected to
intimidation and violence at the hands of members and associates of the
enterprise.
C. Schemes To Defraud Investors In Private Placements of Securities
16. The enterprise entered into unlawful agreements with companies that
sought to sell securities to investors in private placements. Members and
associates of the enterprise dominated and controlled each of these companies.
The essence of
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these unlawful agreements was that brokers who sold securities in these private
placements would be paid secret exorbitant sales commissions of up to 50
percent of the proceeds obtained from investors. The enterprise profited by
retaining a portion of these excessive sales commissions for itself. The
enterprise also sought to further the control and domination of its members and
associates over these companies by assisting in raising capital through
fraudulent means. Among other private placements of securities, the enterprise
fraudulently sold and agreed to cause the sale of securities issued by the
following companies:
a. Ranch*1 Inc., a Delaware corporation with its principal
place of business in New York, New York. Ranch*1 operated and franchised
fast-food restaurants featuring grilled chicken sandwiches throughout New York
City area and elsewhere.
b. World Gourmet Soups, Inc., d/b/a "The Manhattan Soup Man,"
("Manhattan Soup Man"), a Delaware corporation with its principal place of
business in New York, New York. Manhattan Soup Man operated and franchised fast
food restaurants and kiosks and sold prepared soups to the restaurant industry.
c. Jackpot Entertainment Magazine, Inc., ("Jackpot") a New
York corporation with its principal place of
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business in Brooklyn, New York. Jackpot published a magazine on the gaming
industry.
D. The Money Laundering Schemes
17. The enterprise engaged in, and caused other persons and entities
to engage in, a variety of financial transactions with the proceeds of its
securities fraud schemes that were designed to conceal the fact that funds
received from defrauded investors were the proceeds of specified unlawful
activity, and to promote continuing schemes to defraud investors. These
laundering transactions took the following forms, among others: (a) structured
withdrawals of cash from financial institutions; (b) checks drawn on bank
accounts in the names of nominees to pay off brokers; (c) wire transfers of
funds to bank and brokerage accounts in the names of nominees to pay bribes to
brokers; and (d) wire transfers of funds to bank accounts of persons who agreed
to return cash to the enterprise in return for a fee.
E. The Union Pension Fund
Fraud and Kickback Schemes
18. In or about the Fall of 1999, the enterprise expanded its
racketeering activity to include schemes to defraud the pension funds of
various union locals and to pay illegal kickbacks to union officials. Some of
these union locals were influenced by LCN Families, including Production
Workers Local 400, which was influenced by the Colombo Crime Family. In
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addition to these union locals, the enterprise also targeted the pension fund
of the Detectives' Endowment Association, the labor organization that serves
the interests of detectives of the New York City Police Department.
19. To achieve it unlawful objectives, the enterprise devised two
fraudulent investments that appeared to be investments suitable for pension
funds and that were designed to appear legitimate so as to withstand the
scrutiny of honest union officials. These fraudulent investments included:
a. A securities offering of American Realty Trust, a publicly
traded real estate investment trust that was listed on the New York Stock
Exchange under the ticker symbol "ARB." The affairs of American Realty Trust
were controlled by Basic Capital Management Inc. ("Basic Capital"), a Dallas,
Texas advisory firm that also advised three related real estate investment
trusts. Pursuant to the scheme, Basic Capital agreed with the enterprise to
cause American Realty Trust to issue a series of preferred stock (the "ARB
Series J Preferred Stock"). Basic Capital further agreed with the enterprise
that for every $13 million of ARB Series J Preferred Stock sold to
institutional buyers, including union pension funds, Basic Capital would cause
approximately $2 million of the proceeds to be paid secretly to the enterprise.
The enterprise, including members and associates affiliated with Basic Capital,
planned to pay off
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corrupt union officials with a portion of its share of the offering proceeds.
b. An offering of interests in a hedge fund known as the
"TradeVentureFund," which represented itself as having a proprietary trading
strategy in securities, commodities, futures, and options as well as stocks
that permitted it to significantly out-perform such market benchmarks as the
Standard & Poor's 500 Index and the NASDAQ Composite Index. TradeVentureFund
also claimed to set aside a portion of its funds under management for venture
capital investments in companies. Pursuant to the scheme, TradeVentureFund
would churn commodities transactions, thereby generating excessive trading
commission expenses, a portion of which would be kicked back to the enterprise.
The enterprise in turn planned to pay off corrupt union officials with a
portion of its share of the kickback. In addition, TradeVentureFund planned to
place a portion of its venture capital funds in fraudulent deals coordinated by
members and associates of the enterprise in a manner designed to generate
unlawful profits for the enterprise.
F. Bribery and Witness Tampering
20. The enterprise sought to impede federal law enforcement scrutiny
of its illegal activities, and the illegal activities of members and associates
of LCN Families, by obtaining confidential information concerning federal law
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enforcement investigations and disseminating such information to members and
associates of the enterprise. This confidential information concerned, among
other things, whether members and associates of the enterprise, as well as
members and associates of LCN Families, were the subjects of federal grand jury
investigations, faced imminent indictment and arrest, and were the subjects of
electronic surveillance. The enterprise shared this information with members
and associates of LCN Families in the New York City area.
21. The enterprise sought to identify informants and cooperating
witnesses whom the enterprise believed had assisted the Federal Bureau of
Investigation in its investigations and who agreed to testify in federal
criminal trials of members and associates. The enterprise further sought to
prevent the attendance and testimony of cooperating witnesses at grand jury
proceedings and trials through, among other means, the solicitation of murder.
The Defendants
22. At various times relevant to the Indictment, the defendants listed
below were members of the enterprise:
a. ROBERT A. LINO, a/k/a "Little Robert," the defendant, was a
soldier and later a capo in the Bonanno Crime Family. LINO supervised the
activities of members and associates of the enterprise. LINO used his
membership in the Bonanno Crime
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Family to control the activities of the members and associates of the
enterprise and to resolve disputes among the members and associates, as well as
disputes between members and associates of the enterprise and others.
b. JAMES S. LABATE, a/k/a "Jimmy," the defendant, was an associate
of the Gambino Crime Family who had functioned as an associate of the Bonanno
Crime Family and had endeavored to become a member of that crime family. LABATE
was a partner in the operation of DMN Capital. Among other things, LABATE
participated in the enterprise's schemes to defraud, and used threats,
intimidation, and extortion to further the interests of the enterprise.
c. FRANK A. PERSICO, a/k/a "Frankie," the defendant, was an associate
of the Colombo Crime Family. PERSICO was a registered stock broker who headed
crews of corrupt brokers at William Scott, First Liberty, and Bryn Mawr.
PERSICO participated in the enterprise's schemes to defraud investors in
Reclaim, International Nursing, Leasing Edge, Innovative Medical, Globus
International, and GTrade, among others. As of in or about June 1999, PERSICO
was the Treasurer of Production Workers Local 400 in New York, New York ("Local
400"). PERSICO used his status with the Colombo Crime Family to facilitate the
enterprise's plan to defraud Local 400.
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d. ANTHONY P. STROPOLI, the defendant, was an associate of and later
a soldier in the Colombo Crime Family. STROPOLI controlled the 30 Broad Street
branch of First Liberty and later, together with FRANK PERSICO, the defendant,
secretly controlled Bryn Mawr Investment Group branches in Manhattan and on
Staten Island. Among other things, STROPOLI participated in the scheme to
defraud investors in Globus International and in the enterprise's money
laundering activities.
e. SALVATORE R. PIAZZA, a/k/a "Sal," the defendant, was an associate
of the Bonanno Crime Family, a partner in DMN Capital and an owner of Monitor.
Among other things, PIAZZA facilitated the enterprise's secret control of
Monitor and coordinated the payment of secret bribes to brokers.
f. STEPHEN E. GARDELL, the defendant, was a New York City Police
Department ("NYPD") Detective and the Treasurer of the Detectives' Endowment
Association ("DEA"). Among other things, GARDELL received bribes in return for
providing confidential information concerning federal law enforcement
operations to other members and associates of the enterprise, and corruptly
agreed to defraud the DEA pension plan for the benefit of the enterprise and
for personal profit.
g. CARY F. CIMINO, the defendant, was a New York-based stock promoter
who, among other things, arranged for secret bribes to scores of corrupt
brokers on deals controlled by
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the enterprise, including Spaceplex, Reclaim, Beachport and International
Nursing. CIMINO also solicited the murder of a person he believed to be a
cooperating witness.
h. SEBASTIAN RAMETTA, a/k/a "Sebbie," the defendant, was an associate
of the Colombo Crime Family. RAMETTA was the president and chief executive
officer of Ranch*1, and controlled stock in Ranch*1 and Manhattan Soup Man
securities offerings both to obtain money and to advance the interests of the
Colombo Crime Family in these businesses.
i. JAMES F. CHICKARA, the defendant, was an associate of the Colombo
Crime Family. CHICKARA was the vice chairman of Ranch*1, and controlled stock
in Ranch*1 and Manhattan Soup Man. CHICKARA agreed with members and associates
of the enterprise to defraud investors in Ranch*1 and Manhattan Soup Man
securities offerings both to obtain money and to advance the interests of the
Colombo Crime Family in these businesses.
j. ROBERT P. GALLO, a/k/a "Bobby," the defendant, was an associate of
the Genovese Crime Family who, among other things, assisted members and
associates of the enterprise in operating Monitor, recruiting crews of brokers
to work on behalf of the enterprise, and facilitating secret cash
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payments to crews of brokers at other brokerage firms, including William Scott
and Atlantic General.
k. MICHAEL T. GRECCO, the defendant, was an associate of the Colombo
Crime Family who, among other things, presented fraudulent deals to the
enterprise, assisted members and associates of the enterprise in laundering the
proceeds of unlawful activity, and facilitated secret cash payments to brokers.
l. JOHN M. BLACK, JR., the defendant, was an associate of the
Luchese Crime Family and the principal of Grady and Hatch & Company Inc., a
broker-dealer in New York, New York. Among other things, BLACK facilitated the
union pension fund schemes by recruiting GLENN B. LAKEN, the defendant, to the
enterprise.
m. ANGELO CALVELLO, a/k/a "Tony," the defendant, assisted members
and associates of the enterprise in recruiting union locals, including Local 137
of the Operating Engineers Union, to participate in fraudulent investment
schemes. In addition, CALVELLO agreed to participate in fraudulent private
offering of Ranch*1 stock.
n. JOSEPH A. MANN, a/k/a "Andy," the defendant, was a stock promoter
and investment banker who controlled, among other entities, First Columbus
Securities, Ltd., a purported broker-dealer based in Nevis, West Indies, and the
International
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Depositary Trust Corp. Among other things, MANN introduced to the
enterprise corrupt deals, including Spaceplex, GTrade, and ARB Series J
Preferred Stock, assisted in fraudulent promotions and market manipulation, and
shared in the unlawful proceeds of securities fraud.
o. WILLIAM M. STEPHENS, a/k/a "Bill," the defendant, was the chief
investment strategist of Husic Capital Management, an investment adviser based
in San Francisco, California. Among other things, STEPHENS agreed to bribe
union officials to induce them to place union pension assets under his
management and to violate his fiduciary duties to his clients by investing
those assets in ARB Series J Preferred Stock and TradeVentureFund.
p. GLENN B. LAKEN, the defendant, was the principal manager of the
TradeVentureFund. Among other things, LAKEN participated in the union pension
fund and kickback schemes by recruiting WILLIAM M. STEPHENS, a/k/a "Bill," the
defendant, and agreeing to pay secret bribes to union officials funded through
kickbacks from TradeVentureFund.
q. GENE PHILLIPS, the defendant, secretly controlled Basic Capital,
the adviser to American Realty Trust, Inc., the issuer of the ARB Series J
Preferred Stock. PHILLIPS agreed with other members and associates of the
enterprise to defraud union pension funds in connection with the sale of ARB
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Series J Preferred Stock. PHILLIPS used his secret control of Basic Capital to
order the issuance of ARB Series J Preferred Stock.
r. A. CAL ROSSI, the defendant, was the managing director of capital
markets for Basic Capital. ROSSI structured the fraudulent ARB Series J
Preferred Stock offering with members and associates of the enterprise and
agreed that a portion of the offering proceeds would be used to pay secret
bribes to union officials.
s. VINCENT G. LANGELLA, a/k/a "Vinny," the defendant, was an
associate of the Colombo Crime Family. LANGELLA was a registered stock broker
at, among other firms, William Scott, First Liberty and Bryn Mawr. Among other
things, LANGELLA participated in schemes to defraud investors in International
Nursing and GTrade.
t. WILLIAM F. PALLA, the defendant, was a principal of Monitor who
facilitated the enterprise's secret control of Monitor. Among other things,
PALLA supervised the Monitor "boiler room" at 20 Exchange Place in Manhattan and
jointly oversaw Monitor's trading activities.
u. TODD M. NEJAIME, the defendant, was a stock broker and promoter.
Among other things, NEJAIME accepted secret bribes in returning for procuring
the sale of millions of dollars
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of stocks fraudulently promoted by the enterprise. NEJAIME also managed
Monitor's Third Avenue office in Manhattan.
The Racketeering Violation
23. From in or about early 1995 to the present, in the Southern
District of New York and elsewhere, ROBERT A. LINO, a/k/a "Little Robert," JAMES
S. LABATE, a/k/a "Jimmy," FRANK A. PERSICO, a/k/a "Frankie," ANTHONY P.
STROPOLI, SALVATORE R. PIAZZA, a/k/a "Sal," STEPHEN E. GARDELL, CARY F. CIMINO,
SEBASTIAN RAMETTA, a/k/a "Sebbie," JAMES F. CHICKARA, ROBERT P. GALLO, a/k/a
"Bobby," MICHAEL T. GRECCO, JOHN M. BLACK, JR., ANGELO CALVELLO, a/k/a "Tony,"
JOSEPH A. MANN, a/k/a "Andy," WILLIAM M. STEPHENS, a/k/a "Bill," GLENN B. LAKEN,
GENE PHILLIPS, A. CAL ROSSI, VINCENT G. LANGELLA, a/k/a "Vinny," WILLIAM F.
PALLA, and TODD M. NEJAIME, the defendants, and others known and unknown, being
persons employed by and associated with the racketeering enterprise described in
paragraphs one to twenty-two, which enterprise was engaged in, and the
activities of which affected, interstate and foreign commerce, unlawfully,
willfully, and knowingly conducted and participated, directly and indirectly, in
the conduct of the affairs of that enterprise through a pattern of racketeering
activity, that is, through the commission of the following acts of racketeering:
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The Pattern of Racketeering Activity
24. The pattern of racketeering activity, as defined in Title 18,
United States Code, Sections 1961(1) and 1961(5), consisted of the following
acts:
Racketeering Act One
Fraud In Connection With The
Purchase And Sale of Spaceplex Securities
25. From in or about January 1995, up to and including in or about
October 1995, in the Southern District of New York and elsewhere, ROBERT A.
LINO, a/k/a "Little Robert," JAMES S. LABATE, a/k/a, "Jimmy," SALVATORE R.
PIAZZA, a/k/a "Sal," JOSEPH A. MANN, a/k/a "Andy," ROBERT P. GALLO, a/k/a
"Bobby," CARY F. CIMINO, and TODD M. NEJAIME, the defendants, together with
others known and unknown, unlawfully, willfully, and knowingly, by the use of
the means and instrumentalities of interstate commerce and of the mails,
directly and indirectly, used and employed manipulative and deceptive devices
and contrivances in violation of Title 17, Code of Federal Regulations, Section
240.10b-5, by (a) employing devices, schemes, and artifices to defraud, (b)
making untrue statements of material facts and omitting to state material facts
necessary in order to make the statements made, in the light of the
circumstances under which they were made, not misleading, and (c) engaging in
acts, practices, and courses of business which operated and would operate as a
fraud and deceit upon a person, in connection with the purchase and sale of
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Spaceplex common stock, in violation of Title 15, United States Code, Sections
78j(b) and 78ff and Title 18, United States Code, Section 2.
Racketeering Act Two
Fraud In Connection With The
Purchase And Sale of Reclaim Securities
26. From in or about May 1995, up to and including in or about
September 1995, in the Southern District of New York and elsewhere, ROBERT A.
LINO, a/k/a "Little Robert," JAMES S. LABATE, a/k/a, "Jimmy," SALVATORE R.
PIAZZA, a/k/a "Sal," FRANK A. PERSICO, a/k/a "Frankie," ROBERT P. GALLO, a/k/a
"Bobby," CARY F. CIMINO, and TODD M. NEJAIME, the defendants, together with
others known and unknown, unlawfully, willfully, and knowingly, by the use of
the means and instrumentalities of interstate commerce and of the mails,
directly and indirectly, used and employed manipulative and deceptive devices
and contrivances in violation of Title 17, Code of Federal Regulations, Section
249.10b-5, by (a) employing devices, schemes, and artifice to defraud, (b)
making untrue statements of material facts and omitting to state material facts
necessary in order to make the statements made, in the light of the
circumstances under which they were made, not misleading, and (c) engaging in
acts, practices, and courses of business which operated and would operate as a
fraud and deceit upon a person, in connection with the purchase and sale of
Reclaim common stock, in violation of
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Title 15, United States Code, Sections 78j(b) and 78ff and Title 18, United
States Code, Section 2.
Racketeering Act Three
Fraud In Connection With The
Purchase And Sale of Beachport Securities
27. From in or about August 1995, up to and including in or about May 1996,
in the Southern District of New York and elsewhere, ROBERT A. LINO, a/k/a
"Little Robert," JAMES S. LABATE, a/k/a, "Jimmy," SALVATORE R. PIAZZA, a/k/a
"Sal," ROBERT P. GALLO, a/k/a "Bobby," WILLIAM F. PALLA, CARY F. CIMINO, and
TODD M. NEJAIME, together with others known and unknown, unlawfully, willfully,
and knowingly, by the use of the means and instrumentalities of interstate
commerce and of the mails, directly and indirectly, used and employed
manipulative and deceptive devices and contrivances in violation of Title 17,
Code of Federal Regulations, Section 240.10b-5, by (a) employing devices,
schemes, and artifices to defraud, (b) making untrue statements of material
facts and omitting to state material facts necessary in order to make the
statements made, in the light of the circumstances under which they were made,
not misleading, and (c) engaging in acts, practices, and courses of business
which operated and would operate as a fraud and deceit upon a person, in
connection with the purchase and sale of Beachport common stock, in violation of
Title 15, United States Code, Sections 78j(b) and 78ff and Title 18, United
States Code, Section 2.
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Racketeering Act Four
Fraud In Connection With The
Purchase And Sale of International Nursing Securities
28. From in or about October 1995, up to and including in or about
June 1996, in the Southern District of New York and elsewhere, ROBERT A. LINO,
a/k/a "Little Robert," JAMES S. LABATE, a/k/a, "Jimmy," SALVATORE R. PIAZZA,
a/k/a "Sal," FRANK A. PERSICO, a/k/a "Frankie," ROBERT P. GALLO, a/k/a "Bobby,"
WILLIAM F. PALLA, TODD M. NEJAIME, and VINCENT G. LANGELLA, a/k/a "Vinny," the
defendants, together with others known and unknown, unlawfully, willfully, and
knowingly, by the use of the means and, instrumentalities of interstate
commerce and of the mails, directly and indirectly, used and employed
manipulative and deceptive devices and contrivances in violation of Title 17,
Code of Federal Regulations, Section 240.10b-5, by (a) employing devices,
schemes, and artifices to defraud, (b) making untrue statements of material
facts and omitting to state material facts necessary in order to make the
statements made, in the light of the circumstances under which they were made,
not misleading, and (c) engaging in acts, practices, and courses of business
which operated and would operate as a fraud and deceit upon a person in
connection with the purchase and sale of International Nursing common stock,
preferred stock and warrants, in violation of Title 15, United States Code,
Sections 78j(b) and 78ff and Title 18, United States Code, Section 2.
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Racketeering Act Five
Fraud In Connection With The
Purchase and Sale of Leasing Edge Securities
29. From in or about November 1995, up to and including in or about October
1996, in the Southern District of New York and elsewhere, ROBERT A. LINO, a/k/a
"Little Robert," JAMES S. LABATE, a/k/a, "Jimmy," SALVATORE R. PIAZZA, a/k/a
"Sal," and FRANK A. PERSICO, a/k/a/ "Frankie," the defendants, together with
others known and unknown, unlawfully, willfully, and knowingly, by the use of
the means and instrumentalities of interstate commerce and of the mails,
directly and indirectly, used and employed manipulative and deceptive devices
and contrivances in violation of Title 17, Code of Federal Regulations, Section
240.10b-5, by (a) employing devices, schemes; and artifices to defraud, (b)
making untrue statements of material facts and omitting to state material facts
necessary in order to make the statements made, in the light of the
circumstances under which they were made, not misleading, and (c) engaging in
acts, practices, and courses of business which operated and would operate as a
fraud and deceit upon a person, in connection with the purchase and sale of
Leasing Edge common stock and warrants, in violation of Title 15, United States
Code, Sections 78j(b) and 78ff and Title 18, United States Code, Section 2.
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Racketeering Act Six
Fraud In Connection With The
Purchase And Sale of Accessible Software Securities
30. From in or about December 1995, up to and including in or about May
1996, in the Southern District of New York and elsewhere, JAMES S. LABATE,
a/k/a, "Jimmy," SALVATORE R. PIAZZA, a/k/a "Sal," WILLIAM F. PALLA," and TODD M.
NEJAIME, the defendants, together with others known and unknown, unlawfully,
willfully, and knowingly, by the use of the means and instrumentalities of
interstate commerce and of the mails, directly and indirectly, used and employed
manipulative and deceptive devices and contrivances in violation of Title 17,
Code of Federal Regulations, Section 240.10b-5, by (a) employing devices,
schemes, and artifices to defraud, (b) making untrue statements of material
facts and omitting to state material facts necessary in order to make the
statements made, in the light of the circumstances under which they were made,
not misleading, and (c) engaging in acts, practices, and courses of business
which operated and would operate as a fraud and deceit upon a person, in
connection with the purchase and sale of Accessible Software common stock, in
violation of Title 15, United State Code, Sections 78j(b) and 78ff and Title 18,
United States Code, Section 2.
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Racketeering Act Seven
Fraud In Connection With The
Purchase And Sale of Globus International Securities
31. From in or about October 1996, up to and including in or about January
1998, in the Southern District of New York and elsewhere, JAMES S. LABATE,
a/k/a/, "Jimmy," SALVATORE R. PIAZZA, a/k/a "Sal," FRANK A. PERSICO, a/k/a
"Frankie," and ANTHONY P. STROPOLI, the defendants, and Steven J. Dapuzzo,
together with others known and unknown, unlawfully, willfully, and knowingly,
by the use of the means and instrumentalities of interstate commerce and of the
mails, directly and indirectly, used and employed manipulative and deceptive
devices and contrivances in violation of Title 17, Code of Federal Regulations,
Section 240.10b-5, by (a) employing devices, schemes, and artifices to defraud,
(b) making untrue statements of material facts and omitting to state material
facts necessary in order to make the statements made, in the light of the
circumstances under which they were made, not misleading, and (c) engaging in
acts, practices, and courses of business which operated and would operate as a
fraud and deceit upon a person, in connection with the purchase and sale of
Globus International common stock, in violation of Title 15, United States
Code, Sections 78j(b) and 78ff and Title 18, United States Code, Section 2.
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Racketeering Act Eight
Extortion of a Stock Promoter
32. The defendants named below committed the following acts, any of
one which alone constitutes the commission of Racketeering Act Eight:
a. Extortion Conspiracy
In or about April and May 1995, in the Southern District of New York
and elsewhere, JAMES S. LABATE, a/k/a "Jimmy," CARY F. CIMINO, and ROBERT P.
GALLO, a/k/a "Bobby," the defendants, and others known and unknown, unlawfully,
willfully, and knowingly combined, conspired, confederated, and agreed together
and with each other to commit extortion, as that term is defined in Title 18,
United States Code, Section 1951(b)(2), by taking money and property, namely, a
$40,000 debt owed by a stock promotor to CARY F. CIMINO, the defendant, from and
with the consent of the stock promoter, which consent was induced by the
wrongful use of actual and threatened force, violence, and fear, and thereby
would and did obstruct, delay, and affect commerce, and the movement of articles
and commodities in commerce, as that term is defined in Title 18, United States
Code, Section 1951(b)(3), in violation of Title 18, United States Code, Section
1951.
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b. Attempted Extortion
In or about May 1995, in the Southern District of New York and
elsewhere, JAMES S. LABATE, a/k/a "Jimmy," CARY F. CIMINO, and ROBERT P. GALLO,
a/k/a "Bobby," the defendants, and others known and unknown, unlawfully,
willfully, and knowingly attempted to commit extortion, as that term is defined
in Title 18, United States Code, Section 1951(b)(2), by taking and attempting
to take money and property, a $40,000 debt owed by a stock promoter to CARY F.
CIMINO, from and with the consent of the stock promoter, which consent was
induced by the wrongful use of actual and threatened force, violence, and fear,
and thereby would obstruct, delay, and affect commerce, and the movement of
articles and commodities in commerce, as that term is defined in Title 18,
United States Code, Section 1951(b)(3), in violation of Title 18, United States
Code, Sections 1951 and 2.
c. Extortion Conspiracy
In or about April and May 1995, in the Southern District of New York
and elsewhere, JAMES S. LABATE, a/k/a "Jimmy," CARY F. CIMINO, and ROBERT P.
GALLO, a/k/a "Bobby," the defendants, and others known and unknown, unlawfully,
willfully, and knowingly, combined, conspired, confederated, and agreed
together and with each other to steal the property of another, namely, a sum of
money from a stock promoter, by means of extortion, by instilling in the stock
promoter a fear that the
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defendants would cause physical injury to some person in the future, in
violation of New York State Penal Law.
Racketeering Act Nine
Money Laundering Conspiracy
33. From in or about January 1995 to in or about October 1996, in the
Southern District of New York and elsewhere, ROBERT A. LINO, a/k/a "Little
Robert," JAMES S. LABATE, a/k/a "Jimmy," FRANK A. PERSICO, a/k/a "Frankie,"
SALVATORE R. PIAZZA, a/k/a "Sal," CARY F. CIMINO, ROBERT P. GALLO, a/k/a
"Bobby," TODD M. NEJAIME, together with others known and unknown, knowing that
the property involved in financial transactions represented the proceeds of some
form of unlawful activity, did knowingly and intentionally conspire to conduct
such financial transactions affecting interstate and foreign commerce, which
transactions in fact involved the proceeds of a specified unlawful activity,
namely, securities fraud in connection with purchases and sales of securities
issued by Reclaim, Beachport, and International Nursing, in violation of Title
15, United States Code, Sections 78j(b) and 78ff, (a) with the intent to promote
the carrying on of said specified unlawful activity, and (b) knowing that the
transactions were designed in whole and in part to conceal and disguise the
nature, location, source, ownership and control of the proceeds of said
specified unlawful activity, all in violation of Title 18, United State Code,
Section 1956(h).
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Racketeering Act Ten
Money Laundering Conspiracy
34. From in or about December 1999 to the present, in the Southern
District of New York and elsewhere, JAMES S. LABATE, a/k/a "Jimmy," ANTHONY P.
STROPOLI, SALVATORE R. PIAZZA, a/k/a "Sal," MICHAEL T. GRECCO, the defendants,
and Ralph Dematteo, together with others known and unknown, knowing that the
property involved in financial transactions represented the proceeds of some
form of unlawful activity, did knowingly and intentionally conspire to conduct
such financial transactions affecting interstate and foreign commerce, which
transactions in fact involved the proceeds of a specified unlawful activity,
namely, fraud in the sale of securities, in violation of Title 15, United
States Code, Sections 78j(b) and 78ff and Title 18, and wire fraud, in
violation of United States Code, Section 1343, (a) with the intent to promote
the carrying on of said specified unlawful activity, and (b) knowing that the
transactions were designed in whole and in part to conceal and disguise the
nature, location, source ownership and control of the proceeds of said
specified unlawful activity, all in violation of Title 13, United States Code,
Section 1956(h).
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Racketeering Act Eleven
Kickback and Wire Fraud Schemes
Targeting Production Workers Pension Fund
35. The defendants named below committed the following acts, any one of
which alone constitutes the commission of Racketeering Act Eleven:
a. Receipt of Illegal Kickbacks
From in or about October 1999 to the present, in the Southern District of
New York and elsewhere, FRANK A. PERSICO, a/k/a "Frankie" the defendant, being
an officer, counsel, agent and employee of an employee organization, namely,
Production Workers Local 400, whose members were covered by an employee pension
benefit plan subject to title I of the Employee Retirement Income Security Act,
namely, the Production Workers Pension Fund, did unlawfully and knowingly
receive and agree to receive and solicit fees, kickbacks, commissions, gifts,
loans, money and things of value because of and with intent to be influenced
with respect to his actions, decisions and other duties relating to questions
and matters concerning such plan, namely, the selection of an investment
adviser and the investment of plan assets in Series J Preferred Stock and
interests in TradeVentureFund, from ROBERT A. LINO, a/k/a "Little Robert,"
JAMES S. LABATE, a/k/a/ "Jimmy," SALVATORE R. PIAZZA, a/k/a "Sal," JOHN M.
BLACK, JR., JOSEPH A. MANN, a/k/a "Andy," WILLIAM M. STEPHENS, a/k/a "Bill,"
GLENN B. LAKEN, GENE PHILLIPS, and A. CAL
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ROSSI, in violation of Title 18, United States Code, Sections 1954 and 2.
b. Payment of Illegal Kickbacks
From in or about October 1999 to the present, in the Southern District of
New York and elsewhere, ROBERT A. LINO, a/k/a "Little Robert," JAMES S. LABATE,
a/k/a "Jimmy," SALVATORE R. PIAZZA, a/k/a "Sal," JOHN M. BLACK, JR., JOSEPH A.
MANN, a/k/a "Andy," WILLIAM M. STEPHENS, a/k/a "Bill," GLENN B. LAKEN, GENE
PHILLIPS, and A. CAL ROSSI, the defendants, and others known and unknown,
unlawfully, and knowingly did give and offer, and promise to give and offer,
directly and indirectly, fees, kickbacks, commissions, gifts, loans, money and
things of value to FRANK PERSICO, a/k/a "Frankie," who was an officer, counsel,
agent, and employee of an employee organization, namely, Production Workers
Local 400, whose members were covered by an employee pension benefit plan
subject to title I of the Employee Retirement Income Security Act, namely, the
Production Workers Pension Fund, because of and with intent to influence FRANK
PERSICO's actions, decisions and other duties relating to questions and
matters concerning such plan, namely, the selection of an investment adviser
and the investment of plan assets in Series J Preferred Stock and interests in
TradeVentureFund, in violation of Title 18, United States Code, Sections 1954
and 2.
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c. Wire Fraud
From in or about October 1999 to the present, in the Southern District of
New York and elsewhere, ROBERT A. LINO, a/k/a "Little Robert," JAMES S. LABATE,
a/k/a "Jimmy," FRANK A. PERSICO, a/k/a "Frankie," SALVATORE R. PIAZZA, a/k/a
"Sal," JOHN M. BLACK, JR., JOSEPH A. MANN, a/k/a "Andy," WILLIAM M. STEPHENS,
a/k/a "Bill," GLENN B. LAKEN, GENE PHILLIPS, and A. CAL ROSSI, the defendants,
unlawfully, willfully, and knowingly, having devised and intending to devise a
scheme and artifice to defraud and to obtain money and property by means of
false and fraudulent pretenses, representations and promises, namely, a scheme
and artifice to obtain Production Workers Pension Fund assets by fraudulently
causing them to be invested in ARB Series J Preferred Stock and interests in
TradeVentureFund, transmitted and caused to be transmitted by means of wire
communication in interstate and foreign commerce, writings, signs, signals, and
sounds for the purpose of executing such scheme and artifice, namely, a fax
transmission from San Francisco, California to New York, New York on or about
March 2, 2000, in violation of Title 18, United States Code, Sections 1343 and
2.
Racketeering Act Twelve
Scheme to Defraud DEA Annuity Fund
36. From in or about December 1999 to the present, in the Southern District
of New York and elsewhere, ROBERT A. LINO,
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a/k/a "Little Robert," JAMES S. LABATE, a/k/a "Jimmy," STEPHEN E. GARDELL,
SALVATORE R. PIAZZA, a/k/a "Sal," JOHN M. BLACK, JR., JOSEPH A. MANN, a/k/a
"Andy," WILLIAM M. STEPHENS, a/k/a "Bill," GLENN B. LAKEN, GENE PHILLIPS, and
A. CAL ROSSI, the defendants, unlawfully, willfully, and knowingly, having
devised and intending to devise a scheme and artifice to defraud and to obtain
money and property by means of false and fraudulent pretenses, representations
and promises, namely, a scheme and artifice to obtain assets of the Annuity
Fund of the Detectives' Endowment Association by fraudulently causing them to
be invested in ARB Series J Preferred Stock and interests in TradeVentureFund,
transmitted and caused to be transmitted by means of wire communication in
interstate and foreign commerce, writings, signs, signals, and sounds for the
purpose of executing such scheme and artifice, namely, a fax transmission from
San Francisco, California to New York, New York on or about April 13, 2000, in
violation of Title 18, United States Code, Sections 1343 and 2.
Racketeering Act Thirteen
Kickback and Wire Fraud Schemes
Targeting Local 137 Pension Plan
37. The defendants named below committed the following acts, any one of
which alone constitutes the commission of Racketeering Act Thirteen:
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a. Payment of Illegal Kickbacks
From on or about April 5, 2000 to the present, ROBERT A. LINO, a/k/a
"Little Robert," JAMES S. LABATE, a/k/a "Jimmy," SALVATORE R. PIAZZA, a/k/a
"Sal," ANGELO CALVELLO, a/k/a "Tony," JOHN M. BLACK, JR., JOSEPH A. MANN, a/k/a
"Andy," WILLIAM M. STEPHENS, a/k/a "Bill," GLENN B. LAKEN, GENE PHILLIPS, and
A. CAL ROSSI, and the defendants, and others known and unknown, unlawfully and
knowingly did give and offer, and promise to give and offer, directly and
indirectly, fees, kickbacks, commissions, gifts, loans, money and things of
value to persons who were officers, counsel, agents, and employees of an
employee organization, namely, officers of the International Union of Operating
Engineers Local 137 located in Briarcliff Manor, New York, whose members were
covered by an employee pension benefit plan subject to title I of the Employee
Retirement Income Security Act, namely, the pension plans of IUOE Local 137
137A 137B 137C 137R AFL-CIO, because of and with intent to influence their
actions, decisions and other duties relating to questions and matters
concerning such plan, namely, the selection of an investment adviser and the
investment of plan assets in Series J Preferred Stock and interests in
TradeVentureFund, in violation of Title 18, United States Code, Sections 1954
and 2.
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b. Wire Fraud
From on or about April 5, 2000 to the present, in the Southern District
of New York and elsewhere, ROBERT A. LINO, a/k/a "Little Robert," JAMES S.
LABATE, a/k/a "Jimmy," SALVATORE R. PIAZZA, a/k/a "Sal," ANGELO CALVELLO, a/k/a
"Tony," JOHN M. BLACK, JR., JOSEPH A. MANN, a/k/a "Andy," WILLIAM M. STEPHENS,
a/k/a "Bill," GLENN B. LAKEN, GENE PHILLIPS, and A. CAL ROSSI, the defendants,
unlawfully, willfully, and knowingly, having devised and intending to devise a
scheme and artifice to defraud and to obtain money and property by means of
false and fraudulent pretenses, representations and promises, namely, a scheme
and artifice to obtain assets of the pension plans of IUOE Local 137 137A 137B
137C 137R AFL-CIO by fraudulently causing them to be invested in ARB Series J
Preferred Stock and interests in the TradeVentureFund, transmitted and caused to
be transmitted by means of wire communication in interstate and foreign
commerce, writings, signs, signals, and sounds for the purpose of executing such
scheme and artifice, namely, a telephone call between San Francisco, California
to New York, New York on or about April 13, 2000, in violation of Title 18,
United States Code, Sections 1343 and 2.
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Racketeering Act Fourteen
Fraud In Connection With The
Purchase And Sale of GTrade Securities
38. From in or about January 2000 through in or about March 2000, in
the Southern District of New York, and elsewhere, ROBERT A. LINO, JAMES S.
LABATE, a/k/a, "Jimmy," FRANK A. PERSICO, a/k/a "Frankie," JOSEPH A. MANN,
a/k/a "Andy," and VINCENT G. LANGELLA, a/k/a "Vinny," the defendants, together
with others known and unknown, unlawfully, willfully, and knowingly, by the use
of the means and instrumentalities of interstate commerce and of the mails,
directly and indirectly, used and employed manipulative and deceptive devices
and contrivances in violation of Title 17, Code of Federal Regulation, Section
240.10b-5, by (a) employing devices, schemes, and artifices to defraud, (b)
making untrue statements of material facts and omitting to state material facts
necessary in order to make the statements made, in the light of the
circumstances under which they were made, not misleading, and (c) engaging in
acts, practices, and courses of business which operated and would operate as a
fraud and deceit upon a person, in connection with the purchase and sale of
GTrade common stock, in violation of Title 15, United States Code, Sections
78j(b) and 78ff and Title 18, United States Code, Section 2.
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Racketeering Act Fifteen
Bribe Receiving
39. From in or about early 1997 through in or about April 2000, in the
Southern District of New York and elsewhere, STEPHEN E. GARDELL, the defendant,
being a public servant, unlawfully, knowingly, and willfully, did solicit,
accept and agree to accept any benefit, namely, cash, property and other things
of value, from other persons, namely, JAMES S. LABATE, a/k/a Jimmy, and
SALVATORE R. PIAZZA, a/k/a "Sal," the defendants, and others, upon an agreement
and understanding that his vote, opinion, judgment, action, decision, and
exercise of discretion as a public servant would thereby be influenced, namely,
STEPHEN E. GARDELL, the defendant, in return for such cash, property and other
things of value, among other things, corruptly leaked information concerning
federal law enforcement investigations obtained in his capacity as a NYPD
detective to JAMES S. LABATE, a/k/a "Jimmy," SALVATORE R. PIAZZA, a/k/a "Sal,"
the defendants, and others, in violation of New York State Penal law.
Racketeering Act Sixteen
Tampering With a Cooperating Witness
40. CARY F. CIMINO, the defendant named below, committed the following
acts, any one of which alone constitutes the commission of Racketeering Act
Sixteen:
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a. Criminal Solicitation of Murder
On or about August 3, 1999, in the Southern District of New York, CARY F.
CIMINO, the defendant, unlawfully, willfully, and knowingly, and with intent
that another person engage in the murder of a cooperating witness, solicited,
requested, commanded, importuned and otherwise attempted to cause such other
person to murder said cooperating witness, in violation of New York State Penal
Law.
b. Witness Tampering
On or about August 3, 1999, in the Southern District of New York, CARY F.
CIMINO, the defendant, unlawfully, willfully, and knowingly, corruptly
persuaded and attempted to persuade another person, with intent to influence,
delay, and prevent the testimony of a cooperating witness in an official
proceeding and hinder, delay and prevent the communication to law enforcement
officer of information relating to the commission and possible commission of a
Federal offense, namely, CARY F. CIMINO solicited the murder of a person he
believed to be a cooperating witness to prevent his further cooperation and
testimony, in violation of Title 18, United States Code, Sections 1512(b) and 2.
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Racketeering Act Seventeen
Securities Fraud Conspiracy
41. From in or about December 1999 to the present, in the Southern
District of New York and elsewhere, JAMES LABATE, a/k/a "Jimmy," SEBASTIAN
RAMETTA, a/k/a "Sebbie," JAMES F. CHICKARA, and ANGELO CALVELLO, a/k/ "Tony,"
the defendants together with others known and unknown, unlawfully, wilfully,
and knowingly did combine, conspire, confederate, and agree together and with
each other to commit an offense against the United States, to wit, to commit
securities fraud, in violation of Title 15, United States Code, Sections 77q and
77x.
42. It was a part and an object of the conspiracy that JAMES LABATE, a/k/a
"Jimmy, "SEBASTIAN RAMETTA, a/k/a "Sebbie," JAMES F. CHICKARA, and ANGELO
CALVELLO, a/k/ "Tony," the defendants, and others known and unknown, unlawfully,
wilfully, and knowingly, in the offer and sale of securities by the use of the
means and instruments of transportation and communication in interstate commerce
and by the use of the mails, directly and indirectly, would and did: (a) employ
devices, schemes, and artifices to defraud; (b) obtain money and property by
means of untrue statements of material fact and omit to state material facts
necessary in order to make the statements made, in light of the circumstances
under which they were made, not misleading; and (c) engage in transactions,
practices and courses of business
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which operated and would operate as a fraud and deceit upon the purchasers of
the common stock of Ranch*1, in violation of Title 15, United States Code,
Sections 77q and 77x, all in violation of Title 18, United States Code, Section
371.
43. In furtherance of said conspiracy and to effect the objects thereof,
the following overt acts, among others, were committed in the Southern District
of New York and elsewhere:
a. On or about January 26, 2000, JAMES F. CHICKARA, the defendant,
attended a meeting at DMN Capital's office.
b. On or about April 11, 2000, ANGELO CALVELLO, a/k/a "Tony," the
defendant, met with JAMES S. LABATE, a/k/a "Jimmy," the defendant, and another
person at DMN Capital's office.
c. On or about April 24, 2000, SEBASTIAN RAMETTA, a/k/a "Sebbie," the
defendant, attended a meeting at DMN Capital's office.
Racketeering Act Eighteen
Fraud In The Offer And Sale of Manhattan Soupman Securities
44. From in or about November 1999 to the present, in the Southern District
of New York and elsewhere, JAMES S. LABATE, a/k/a "Jimmy," SALVATORE R. PIAZZA,
a/k/a "Sal," SEBASTIAN RAMETTA, a/k/a "Sebbie," and JAMES F. CHICKARA, the
defendants, and others known and unknown, unlawfully, wilfully, and
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<PAGE> 47
knowingly, in the offer and sale of securities by the use of the means and
instruments of transportation and communication in interstate commerce and by
the use of the mails, directly and indirectly, did: (a) employ devices,
schemes, and artifices to defraud; (b) obtain money and property by means of
untrue statements of material fact and omit to state material facts necessary in
order to make the statements made, in light of the circumstances under which
they were made, not misleading; and (c) engage in transactions, practices and
courses of business which operated and would operate as a fraud and deceit upon
the purchasers of the common stock of the Manhattan Soup Man, in violation of
Title 15, United States Code, Sections 77q and 77x and Title 18, United States
Code, Section 2.
Racketeering Act Nineteen
Fraud In Connection With The
Purchase And Sale of Healthwatch Securities
45. From in or about October 1999 through in or about November 1999,
in the Southern District of New York and elsewhere JAMES S. LABATE, a/k/a
"Jimmy," MICHAEL T. GRECCO, the defendant, together with others known and
unknown, unlawfully, willfully, and knowingly, by the use of the means and
instrumentalities of interstate commerce and of the means and instrumentalities
of interstate commerce and of the mails, directly and indirectly, used and
employed manipulative and deceptive devices and contrivances in violation of
Title 17, Code of Federal Regulations, Section 240.10b-5, by (a) employing
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devices, schemes, and artifices to defraud, (b) making untrue statements of
material facts and omitting to state material facts necessary in order to make
the statements made, in the light of the circumstances under which they were
made, not misleading, and (c) engaging in acts, practices, and courses of
business which operated and would operate as a fraud and deceit upon a person,
in connection with the purchase and sale of Healthwatch common stock, in
violation of Title 15, United States Code, Sections 78j(b) and 78ff and Title
18, United States Code, Section 2.
(Title 18, United States Code, Section 1962(c).)
COUNT TWO
Racketeering Conspiracy
The Grand Jury further charges:
46. Paragraphs 1 through 22 and 24 through 45 of this Indictment are
repeated, realleged and incorporated by reference as though fully set forth
herein.
47. From in or about late 1994 to the present, in the Southern District
of New York and elsewhere, ROBERT A. LINO, a/k/a "Little Robert," JAMES S.
LABATE, a/k/a "Jimmy," FRANK A. PERSICO, a/k/a "Frankie," ANTHONY P. STROPOLI,
SALVATORE R. PIAZZA, a/k/a "Sal," STEPHEN E. GARDELL, CARY F. CIMINO, SEBASTIAN
RAMETTA, a/k/a "Sebbie," JAMES F. CHICKARA, ROBERT P. GALLO, a/k/a "Bobby,"
MICHAEL T. GRECCO, JOHN M. BLACK, JR., ANGELO CALVELLO, a/k/a "Tony," JOSEPH A.
MANN, a/k/a "Andy,"
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WILLIAM M. STEPHENS, a/k/a "Bill," GLENN B. LAKEN, GENE PHILLIPS, A. CAL ROSSI,
VINCENT G. LANGELLA, a/k/a "Vinny," WILLIAM F. PALLA, and TODD M. NEJAIME, the
defendants, and others known and unknown, being persons employed by and
associated with the racketeering enterprise described in Paragraphs 1 through 22
of this Indictment, namely, an enterprise that was engaged in and the activities
of which affected interstate and foreign commerce, unlawfully, willfully, and
knowingly combined, conspired, confederated and agreed together and with each
other to violate Title 18, United States Code, Section 1962(c), that is, to
conduct and participate, directly and indirectly, in the conduct of the affairs
of that enterprise through a pattern of racketeering activity, to wit, the
racketeering acts set forth in Paragraphs 24 through 45 of this Indictment as
Racketeering Acts One through Nineteen.
48. It was a part and an object of the conspiracy that each defendant
agreed that a conspirator would commit at least two acts of racketeering in the
conduct of the affairs of the enterprise.
(Title 18, United States Code, Section 1962(d).)
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COUNT THREE
(Conspiracy To Commit Securities Fraud,
Wire Fraud, And Commercial Bribery: Spaceplex)
The Grand Jury further charges:
49. Paragraphs 1 through 22 of this Indictment are repeated,
realleged and incorporated by reference as though fully set forth herein.
THE CONSPIRACY
50. From in or January 1995 through in or about October 1995, in
the Southern District of New York and elsewhere, ROBERT A. LINO, a/k/a "Little
Robert," JAMES S. LABATE, a/k/a, "Jimmy," SALVATORE R. PIAZZA, a/k/a, "Sal,"
JOSEPH A. MANN, a/k/a, "Andy," ROBERT P. GALLO, a/k/a, "Bobby," CARY F. CIMINO,
and TODD M. NEJAIME, the defendants, together with others known and unknown,
unlawfully, wilfully, and knowingly did combine, conspire, confederate, and
agree together and with each other to commit offenses against the United
States, to wit, to commit: (a) securities fraud, in violation of Title 15,
United States Code, Sections 78j(b) and 78ff, and Title 17, Code of Federal
Regulations, Section 240.10b-5; (b) wire fraud, in violation of Title 18,
United States Code, Sections 1343 and 1346; and (c) commercial bribery, in
violation of Title 18, United States Code, Section 1952(a)(3).
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OBJECTS OF THE CONSPIRACY
Fraud in Connection with the
Purchase and Sale of Securities
51. It was a part and an object of the conspiracy that ROBERT A.
LINO, a/k/a "Little Robert," JAMES S. LABATE, a/k/a, "Jimmy," SALVATORE R.
PIAZZA, a/k/a "Sal," JOSEPH A. MANN, a/k/a "Andy," ROBERT P. GALLO, a/k/a
"Bobby," CARY F. CIMINO, and TODD M. NEJAIME, the defendants, together with
others known and unknown, unlawfully, wilfully, and knowingly, by the use of
the means and instrumentalities of interstate commerce and of the mails,
directly and indirectly, would and did use and employ, manipulative and
deceptive devices and contrivances in violation of Title 17, Code of Federal
Regulations, Section 240.10b-5, by: (a) employing devices, schemes, and
artifices to defraud; (b) making untrue statements of material facts and
omitting to state material facts necessary in order to make the statements
made, in the light of the circumstances under which they were made, not
misleading; and (c) engaging in acts, practices, and courses of business which
operated and would operate as a fraud and deceit upon a person, in connection
with the purchase and sale of Spaceplex securities, all in violation of Title
15, United States Code, Sections 78j(b) and 78ff.
Wire Fraud
52. It was further a part and an object of the conspiracy that
ROBERT A. LINO, a/k/a "Little Robert," JAMES S.
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LABATE, a/k/a, "Jimmy," SALVATORE R. PIAZZA, a/k/a "Sal," JOSEPH A. MANN, a/k/a
"Andy," ROBERT P. GALLO, a/k/a "Bobby," CARY F. CIMINO, and TODD M. NEJAIME,
the defendants, together with others known and unknown, unlawfully, wilfully,
and knowingly, having devised a scheme and artifice to defraud, including a
scheme and artifice, among other things, to (a) deprive a broker's customer of
the intangible right to a broker's honest services, (b) violate a broker's duty
to disclose to his customer all material facts concerning securities
transactions in the customer's account, and (c) obtain the customer's money and
property, would and did transmit and cause to be transmitted by means of wire
communication in interstate and foreign commerce, writings, signs, signals,
pictures and sounds for the purpose of executing such scheme and artifice, all
in violation of Title 18, United States Code, Sections 1343 and 1346.
Commercial Bribery
53. It was further a part and an object of the conspiracy that
ROBERT A. LINO, a/k/a "Little Robert," JAMES S. LABATE, a/k/a, "Jimmy,"
SALVATORE R. PIAZZA, a/k/a "Sal," JOSEPH A. MANN, a/k/a "Andy," ROBERT P.
GALLO, a/k/a "Bobby," CARY F. CIMINO, and TODD M. NEJAIME, the defendants, and
others known and unknown, unlawfully, willfully, and knowingly, would and did
travel in interstate commerce and use facilities in interstate and foreign
commerce, with the intent to promote, manage, establish, carry on, and
facilitate the promotion, management,
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establishment, and carrying on of unlawful activity, specifically, commercial
bribery in violation of New York State Penal Law Sections 180.00 and 180.03,
and, thereafter, would and did perform and attempt to perform an act to
promote, manage, establish, carry on, and facilitate the promotion, management,
establishment, and carrying on of such unlawful activity, all in violation of
Title 18, United States Code, Section 1952(a)(3).
MEANS AND METHODS
54. Among the means and methods by which ROBERT A. LINO, a/k/a
"Little Robert," JAMES S. LABATE, a/k/a, "Jimmy," SALVATORE R. PIAZZA, a/k/a
"Sal," JOSEPH A. MANN, a/k/a "Andy," ROBERT P. GALLO, a/k/a "Bobby," CARY F.
CIMINO, and TODD M. NEJAIME, the defendants and their co-conspirators would and
did carry out the conspiracy were the following:
a. ROBERT A. LINO, a/k/a "Little Robert," JAMES S. LABATE,
a/k/a, "Jimmy," SALVATORE R. PIAZZA, a/k/a "Sal," JOSEPH A. MANN, a/k/a "Andy,"
ROBERT P. GALLO, a/k/a "Bobby," CARY F. CIMINO, and TODD M. NEJAIME, the
defendants, and their co-conspirators, obtained control Spaceplex common stock
through a fraudulent securities offering that purportedly complied with SEC
Rule 504.
b. ROBERT A. LINO, a/k/a "Little Robert," JAMES S. LABATE,
a/k/a, "Jimmy," SALVATORE R. PIAZZA, a/k/a "Sal," JOSEPH A. MANN, a/k/a "Andy,"
ROBERT P. GALLO, a/k/a "Bobby," CARY F. CIMINO, and TODD M. NEJAIME, the
defendants, engaged in
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manipulative securities trades for the purpose of fraudulently inflating the
market price of Spaceplex common stock.
c. ROBERT A. LINO, a/k/a "Little Robert," JAMES S. LABATE, a/k/a,
"Jimmy," SALVATORE R. PIAZZA, a/k/a "Sal," JOSEPH A. MANN, a/k/a "Andy," ROBERT
P. GALLO, a/k/a "Bobby," CARY F. CIMINO, and TODD M. NEJAIME, the defendants,
and their co-conspirators, arranged for the payment of secret bribes to stock
brokers who caused their customers to buy and hold Spaceplex common stock.
d. ROBERT A. LINO, a/k/a "Little Robert," JAMES S. LABATE, a/k/a,
"Jimmy," SALVATORE R. PIAZZA, a/k/a "Sal," JOSEPH A. MANN, a/k/a "Andy," ROBERT
P. GALLO, a/k/a "Bobby," CARY F. CIMINO, and TODD M. NEJAIME, the defendants,
and their co-conspirators, sold Spaceplex common stock under the control of DMN
Capital and related entities at fraudulently inflated prices.
OVERT ACTS
55. In furtherance of said conspiracy and to effect the objects
thereof, the following overt acts, among others, were committed in the Southern
District of New York and elsewhere:
a. In or about late 1994, JOSEPH A. MANN, a/k/a "Andy," the
defendant, met with two co-conspirators not named as defendants herein, in New
York, New York to discuss, among other things, the issuance of Spaceplex stock
to DMN Capital and related entities.
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b. On or about April 21, 1995, TODD M. NEJAIME, the defendant,
and a co-conspirator not named as a defendant herein caused a Gilford
Securities customer to purchase approximately 10,000 shares of Spaceplex common
stock.
c. On or about April 24, 1995, JAMES A. LABATE, a/k/a, "Jimmy,"
and SALVATORE R. PIAZZA, a/k/a "Sal," the defendants, and a co-conspirator not
named as defendant herein caused DMN Capital to issue a check to CARY F.
CIMINO, the defendant.
d. On or about July 14, 1995, a co-conspirator not named as a
defendant herein caused an Atlantic General customer to purchase approximately
1,000 shares of Spaceplex common stock.
(Title 18, United States Code, Section 371).
COUNT FOUR
(Securities Fraud: Spaceplex)
The Grand Jury further charges:
56. Paragraphs 1 through 22 of this Indictment are repeated,
realleged and incorporated by reference as though fully set forth herein.
57. From in or about late 1994 through in or about September 1995,
in the Southern District of New York and elsewhere, ROBERT A. LINO, a/k/a
"Little Robert," JAMES S. LABATE, a/k/a, "Jimmy," SALVATORE R. PIAZZA, a/k/a
"Sal," JOSEPH
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A. MANN, a/k/a "Andy," ROBERT P. GALLO, a/k/a "Bobby," CARY F. CIMINO, and TODD
M. NEJAIME, the defendants, together with others known and unknown, unlawfully,
wilfully, and knowingly, directly and indirectly, by use of the means and
instrumentalities of interstate commerce and of the mails, did use and employ
manipulative and deceptive devices and contrivances in violation of Title 17,
Code of Federal Regulations, Section 240.10b-5, by: (a) employing devices,
schemes, and artifices to defraud; (b) making untrue statements of material
facts and omitting to state material facts necessary in order to make the
statements made, in light of the circumstances under which they were made, not
misleading; and (c) engaging in acts, practices, and courses of business which
operated and would operate as a fraud upon a person, in connection with the
purchase and sale of Spaceplex securities.
(Title 15, United States Code, Sections 78j(b) and 78ff, Title
17, Code of Federal Regulations, Section 240.10b-5; and
Title 18, United States Code, Section 2).
COUNT FIVE
(Conspiracy to Commit Securities Fraud,
Wire Fraud, And Commercial Bribery: Reclaim)
The Grand Jury further charges:
58. Paragraphs 1 through 22 of this Indictment are repeated,
realleged and incorporated by reference as though fully set forth herein.
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THE CONSPIRACY
59. From in or May 1995 through in or about September 1995, in the
Southern District of New York and elsewhere, ROBERT A. LINO, a/k/a "Little
Robert," JAMES S. LABATE, a/k/a, "Jimmy," SALVATORE R. PIAZZA, a/k/a "Sal,"
FRANK A. PERSICO, a/k/a "Frankie," ROBERT P. GALLO, a/k/a "Bobby," CARY F.
CIMINO, and TODD M. NEJAIME, the defendants, together with others known and
unknown, unlawfully, wilfully, and knowingly did combine, conspire, confederate,
and agree together and with each other to commit offenses against the United
States, to wit, to commit: (a) securities fraud, in violation of Title 15,
United States Code, Sections 78j(b) and 78ff, and Title 17, Code of Federal
Regulations, Section 240.10b-5; (b) wire fraud, in violation of Title 18, United
States Code, Sections 1343 and 1346; and (c) commercial bribery, in violation of
Title 18, United States Code, Section 1952(a)(3).
OBJECTS OF THE CONSPIRACY
Fraud in Connection with the
Purchase And Sale of Securities
60. It was a part and an object of the conspiracy that ROBERT A.
LINO, a/k/a "Little Robert," JAMES S. LABATE, a/k/a, "Jimmy," SALVATORE R.
PIAZZA, a/k/a "Sal," FRANK A. PERSICO, a/k/a "Frankie," ROBERT P. GALLO, a/k/a
"Bobby," CARY F. CIMINO, and TODD M. NEJAIME, the defendants, together with
others known and unknown, unlawfully, wilfully, and knowingly, by the use of
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the means and instrumentalities of interstate commerce and of the mails,
directly and indirectly, would and did use and employ, manipulative and
deceptive devices and contrivances in violation of Title 17, Code of Federal
Regulations, Section 240.10b-5, by: (a) employing devices, schemes, artifices
to defraud; (b) making untrue statements of material facts and omitting to
state material facts necessary in order to make the statements made, in the
light of the circumstances under which they were made, not misleading; and (c)
engaging in acts, practices, and courses of business which operated and would
operate as a fraud and deceit upon a person, in connection with the purchase
and sale of Reclaim securities, all in violation of Title 15, United States
Code, Sections 78j(b) and 78ff.
Wire Fraud
61. It was further a part and an object of the conspiracy that
ROBERT A. LINO, a/k/a "Little Robert," JAMES S. LABATE, a/k/a, "Jimmy,"
SALVATORE R. PIAZZA, a/k/a "Sal," FRANK A. PERSICO, a/k/a "Frankie," ROBERT P.
GALLO, a/k/a "Bobby," CARY F. CIMINO, and TODD M. NEJAIME, the defendants,
together with others known and unknown, unlawfully, wilfully, and knowingly,
having devised a scheme and artifice to defraud, including a scheme and
artifice, among other things, to (a) deprive a broker's customer of the
intangible right to a broker's honest services, (b) violate a broker's duty to
disclose to his customer
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all material facts concerning securities transactions in the customer's
account, and (c) obtain the customer's money and property, would and did
transmit and cause to be transmitted by means of wire communication in
interstate and foreign commerce, writings, signs, signals, pictures and sounds
for the purpose of executing such scheme and artifice, all in violation of
Title 18, United States Code, Sections 1343 and 1346.
Commercial Bribery
62. It was further a part and an object of the conspiracy that
ROBERT A. LINO, a/k/a "Little Robert," JAMES S. LABATE, a/k/a, "Jimmy,"
SALVATORE R. PIAZZA, a/k/a "Sal," FRANK A. PERSICO, a/k/a "Frankie," ROBERT P.
GALLO, a/k/a "Bobby," CARY F. CIMINO, and TODD M. NEJAIME, the defendants, and
others known and unknown, unlawfully, willfully, and knowingly, would and did
travel in interstate commerce and use facilities in interstate and foreign
commerce, with the intent to promote, manage, establish, carry on, and
facilitate the promotion, management, establishment, and carrying on of unlawful
activity, specifically, commercial bribery in violation of New York State Penal
Law Sections 180.00 and 180.03, and, thereafter, would and did perform and
attempt to perform an act to promote, manage, establish, carry on, and
facilitate the promotion, management, establishment, and carrying on of such
unlawful activity, all in violation of Title 18, United States Code, Section
1952(a)(3).
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MEANS AND METHODS
63. Among the means and methods by which ROBERT A. LINO, a/k/a "Little
Robert," JAMES S. LABATE, a/k/a, "Jimmy," SALVATORE R. PIAZZA, a/k/a "Sal,"
FRANK A. PERSICO, a/k/a "Frankie," ROBERT P. GALLO, a/k/a "Bobby," CARY F.
CIMINO, and TODD M. NEJAIME, the defendants, and their co-conspirators would and
did carry out the conspiracy were the following:
a. ROBERT A. LINO, a/k/a "Little Robert," JAMES S. LABATE,
a/k/a, "Jimmy," SALVATORE R. PIAZZA, a/k/a "Sal," FRANK A. PERSICO, a/k/a
"Frankie," ROBERT P. GALLO, a/k/a "Bobby," CARY F. CIMINO, and TODD M. NEJAIME,
the defendants, and their co-conspirators, obtained control of Reclaim common
stock through, among other means, fraudulent securities offerings that
purportedly complied with SEC Regulation S.
b. ROBERT A. LINO, a/k/a "Little Robert," JAMES S. LABATE,
a/k/a, "Jimmy," SALVATORE R. PIAZZA, a/k/a "Sal," FRANK A. PERSICO, a/k/a
"Frankie," ROBERT P. GALLO, a/k/a "Bobby," CARY F. CIMINO, and TODD M. NEJAIME,
the defendants, engaged in manipulative securities trades for the purpose of
fraudulently inflating the market price of Reclaim common stock.
c. ROBERT A. LINO, a/k/a "Little Robert," JAMES S. LABATE,
a/k/a, "Jimmy," SALVATORE R. PIAZZA, a/k/a "Sal," FRANK A. PERSICO, a/k/a
"Frankie," ROBERT P. GALLO, a/k/a "Bobby," CARY F. CIMINO, and TODD M. NEJAIME,
the defendants, and
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their co-conspirators, arranged for the payment of secret bribes to stock
brokers who caused their customers to buy and hold Reclaim common stock.
d. ROBERT A. LINO, a/k/a "Little Robert," JAMES S. LABATE,
a/k/a, "Jimmy," SALVATORE R. PIAZZA, a/k/a "Sal," FRANK A. PERSICO, a/k/a
"Frankie," ROBERT P. GALLO, a/k/a "Bobby," CARY F. CIMINO, and TODD M. NEJAIME,
the defendants, and their co-conspirators, sold Reclaim common stock under the
control of DMN Capital and related entities at fraudulently inflated prices.
OVERT ACTS
64. In furtherance of said conspiracy and to effect the objects
thereof, the following overt acts, among others, were committed in the Southern
District of New York and elsewhere:
a. On or about May 16, 1995, TODD M. NEJAIME, the defendant,
and a co-conspirator not named as defendant herein caused a Gilford Securities
customer to purchase approximately 4,000 shares of Reclaim common stock.
b. On or about July 19, 1995, JAMES S. LABATE, a/k/a, "Jimmy,"
and SALVATORE R. PIAZZA, a/k/a "Sal," the defendants, and a co-conspirator not
named as defendant herein caused DMN Capital to issue a check in the name of
"Rick Dane."
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c. On or about July 19, 1995, ROBERT P. GALLO, a/k/a "Bobby,"
the defendant, cashed a DMN Capital check issued in the name of "Rick Dane."
d. On or about August 16, 1995, JAMES S. LABATE, a/k/a,
"Jimmy," and SALVATORE R. PIAZZA, a/k/a "Sal," the defendants, and a
co-conspirator not named as defendant herein caused DMN Capital to issue a check
to CARY F. CIMINO, the defendant.
(Title 18, United States Code, Section 371).
COUNT SIX
(Securities Fraud: Reclaim)
The Grand Jury further charges:
65. Paragraphs 1 through 22 of this Indictment are repeated, realleged
and incorporated by reference as though fully set forth herein.
66. From in or about May 1995 through in or about September 1995, in
the Southern District of New York and elsewhere, ROBERT A. LINO, a/k/a "Little
Robert," JAMES S. LABATE, a/k/a, "Jimmy," SALVATORE R. PIAZZA, a/k/a "Sal,"
FRANK A. PERSICO, a/k/a "Frankie," ROBERT P. GALLO, a/k/a "Bobby," CARY F.
CIMINO, and TODD M. NEJAIME, the defendants, together with others known and
unknown, unlawfully, wilfully and knowingly, directly and indirectly, by use of
the means and instrumentalities of interstate commerce and of the mails, did
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use and employ manipulative and deceptive devices and contrivances in violation
of Title 17, code of Federal Regulations, Section 240.10b-5, by: (a) employing
devices, schemes, and artifices to defraud; (b) making untrue statements of
material facts and omitting to state material facts necessary in order to make
the statements made, in light of the circumstances under which they were made,
not misleading; and (c) engaging in acts, practices, and courses of business
which operated and would operate as a fraud upon a person, in connection with
the purchase and sale of Reclaim securities.
(Title 15, United States Code, Sections 78j(b) and 78ff; Title
17, Code of Federal Regulations, Section 240.10b-5; and
Title 18, United States Code, Section 2).
COUNT SEVEN
(Conspiracy To Commit Securities Fraud,
Wire Fraud, And Commercial Bribery: Beachport)
The Grand Jury further charges:
67. Paragraphs 1 through 22 of this Indictment are repeated, realleged,
and incorporated by reference as though fully set forth herein.
THE CONSPIRACY
68. From in or September 1995 through in or about May 1996, in the
Southern District of New York and elsewhere, ROBERT A. LINO, a/k/a "Little
Robert," JAMES S. LABATE, a/k/a, "Jimmy," SALVATORE R. PIAZZA, a/k/a "Sal,"
ROBERT P. GALLO, a/k/a "Bobby," WILLIAM F. PALLA, CARY F. CIMINO, and TODD M.
NEJAIME,
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the defendants, together with others known and unknown, unlawfully, wilfully,
and knowingly did combine, conspire, confederate, and agree together and with
each other to commit offenses against the United States, to wit, to commit: (a)
securities fraud, in violation of Title 15, United States Code, Sections 78j(b)
and 78ff, and Title 17, Code of Federal Regulations, Section 240.I0b-5; (b) wire
fraud, in violation of Title 18, United States Code, Sections 1343 and 1346; and
(c) commercial bribery, in violation of Title 18, United States Code, Section
1952(a)(3).
OBJECTS OF THE CONSPIRACY
Fraud In Connection With The
Purchase And Sale of Securities
69. It was a part and an object of the conspiracy that ROBERT A. LINO,
a/k/a "Little Robert," JAMES S. LABATE, a/k/a, "Jimmy," SALVATORE R. PIAZZA,
a/k/a "Sal," ROBERT P. GALLO, a/k/a "Bobby," WILLIAM F. PALLA, CARY F. CIMINO,
and TODD M. NEJAIME, the defendants, together with others known and unknown,
unlawfully, wilfully, and knowingly, by the use of the means and
instrumentalities of interstate commerce and of the mails, directly and
indirectly, would and did use and employ, manipulative and deceptive devices and
contrivances in violation of Title 17, Code of Federal Regulations, Section
240.10b-5, by: (a) employing devices, schemes, and artifices to defraud; (b)
making untrue statements of material facts and omitting to state
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material facts necessary in order to make the statements made, in the light of
the circumstances under which they were made, not misleading; and (c) engaging
in acts, practices, and courses of business which operated and would operate as
a fraud and deceit upon a person, in connection with the purchase and sale of
Beachport securities, all in violation of Title 15, United States Code,
Sections 78j(b) and 78ff.
Wire Fraud
70. It was further a part and an object of the conspiracy that ROBERT
A. LINO, a/k/a "Little Robert," JAMES S. LABATE, a/k/a, "Jimmy," SALVATORE R.
PIAZZA, a/k/a "Sal," ROBERT P. GALLO, a/k/a "Bobby," WILLIAM F. PALLA, CARY F.
CIMINO, and TODD M. NEJAIME, the defendants, together with others known and
unknown, unlawfully, wilfully, and knowingly, having devised a scheme and
artifice to defraud, including a scheme and artifice, among other things, to
(a) deprive a broker's customer of the intangible right to a broker's honest
services, (b) violate a broker's duty to disclose to his customer all material
facts concerning securities transactions in the customer's account, and (c)
obtain the customer's money and property, would and did transmit and cause to
be transmitted by means of wire communication in interstate and foreign
commerce, writings, signs, signals, pictures and sounds for the purpose of
executing such scheme and artifice, all in violation of Title 18, United States
Code, Sections 1343 and 1346.
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Commercial Bribery
71. It was further a part and an object of the conspiracy that ROBERT
A. LINO, a/k/a "Little Robert," JAMES S. LABATE, a/k/a, "Jimmy," SALVATORE R.
PIAZZA, a/k/a "Sal," ROBERT P. GALLO, a/k/a "Bobby," WILLIAM F. PALLA, CARY F.
CIMINO, and TODD M. NEJAIME, the defendants, and others known and unknown,
unlawfully, willfully, and knowingly, would and did travel in interstate
commerce and use facilities in interstate and foreign commerce, with the intent
to promote, manage, establish, carry on, and facilitate the promotion,
management, establishment, and carrying on of unlawful activity, specifically,
commercial bribery in violation of New York State Penal Law Sections 180.00 and
180.03, and, thereafter, would and did perform and attempt to perform an act to
promote, manage, establish, carry on, and facilitate the promotion, management,
establishment, and carrying on of such unlawful activity, all in violation of
Title 18, United States Code, Section 1952(a)(3).
MEANS AND METHODS
72. Among the means and methods by which ROBERT A. LINO, a/k/a "Little
Robert," JAMES S. LABATE, a/k/a, "Jimmy," SALVATORE R. PIAZZA, a/k/a "Sal,"
ROBERT P. GALLO, a/k/a "Bobby," WILLIAM F. PALLA, CARY F. CIMINO, and TODD M.
NEJAIME, the defendants, and their co-conspirators would and did carry out the
conspiracy were the following:
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a. ROBERT A. LINO, a/k/a "Little Robert," JAMES S. LABATE,
a/k/a, "Jimmy," SALVATORE R. PIAZZA, a/k/a "Sal," ROBERT P. GALLO, a/k/a
"Bobby," WILLIAM F. PALLA, CARY F. CIMINO, and TODD M. NEJAIME, the defendants,
and their co-conspirators, obtained control of Beachport common stock through,
among other means, fraudulent securities offerings that purportedly complied
with SEC Rule 504.
b. ROBERT A. LINO, a/k/a "Little Robert," JAMES S. LABATE,
a/k/a, "Jimmy," SALVATORE R. PIAZZA, a/k/a "Sal," ROBERT P. GALLO, a/k/a
"Bobby," WILLIAM F. PALLA, CARY F. CIMINO, and TODD M. NEJAIME, the defendants,
engaged in manipulative securities trades for the purpose of fraudulently
inflating the market price of Beachport common stock.
c. ROBERT A. LINO, a/k/a "Little Robert," JAMES S. LABATE,
a/k/a, "Jimmy," SALVATORE R. PIAZZA, a/k/a "Sal," ROBERT P. GALLO, a/k/a
"Bobby," WILLIAM F. PALLA, CARY F. CIMINO, and TODD M. NEJAIME, the defendants,
and their co-conspirators, arranged for the payment of secret bribes to stock
brokers who caused their customers to buy and hold Beachport common stock.
d. ROBERT A. LINO, a/k/a "Little Robert," JAMES S. LABATE,
a/k/a, "Jimmy," SALVATORE R. PIAZZA, a/k/a "Sal," ROBERT P. GALLO, a/k/a
"Bobby," WILLIAM F. PALLA, CARY F. CIMINO, and TODD M. NEJAIME, the defendants,
and their co-conspirators, operated three branches of Monitor in New York, New
York that
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employed fraudulent and deceptive "boiler rooms" sales practices in connection
with sales of Beachport common stock.
e. ROBERT A. LINO, a/k/a "Little Robert," JAMES S. LABATE, a/k/a,
"Jimmy," SALVATORE R. PIAZZA, a/k/a "Sal," ROBERT P. GALLO, a/k/a "Bobby,"
WILLIAM F. PALLA, CARY F. CIMINO, and TODD M. NEJAIME, the defendants, and their
co-conspirators, sold Beachport common stock under the control of DMN Capital
and related entities at fraudulently inflated prices.
OVERT ACTS
73. In furtherance of said conspiracy and to effect the objects
thereof, the following overt acts, among others, were committed in the Southern
District of New York and elsewhere:
a. On or about October 11, 1995, TODD M. NEJAIME, the defendant,
and a co-conspirator not named as defendant herein caused a Gilford Securities
customer to purchase approximately 40,000 shares of Beachport common stock.
b. On or about October 31, 1995, a co-conspirator not named as
defendant herein caused a Monitor customer to purchase approximately 50,000
shares of Beachport common stock.
c. On or about December 7, 1995, JAMES S. LABATE, a/k/a, "Jimmy,"
and SALVATORE R. PIAZZA, a/k/a "Sal," the defendants, and a co-conspirator not
named as defendant herein caused DMN Capital to issue a check to CARY F. CIMINO,
the defendant.
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d. On or about May 28, 1996, TODD M. NEJAIME, the defendant,
and a co-conspirator not named as defendant herein caused a Monitor customer to
purchase approximately 1,100 shares of Beachport common stock.
(Title 18, United States Code, Section 371).
COUNT EIGHT
(Securities Fraud: Beachport)
The Grand Jury further charges:
74. Paragraphs 1 through 22 of this Indictment are repeated, realleged
and incorporated by reference as though fully set forth herein.
75. From in or about May 1995 through in or about September 1995, in
the Southern District of New York and elsewhere, ROBERT A. LINO, a/k/a "Little
Robert," JAMES S. LABATE, a/k/a, "Jimmy," SALVATORE R. PIAZZA, a/k/a "Sal,"
ROBERT P. GALLO, a/k/a "Bobby," WILLIAM F. PALLA, CARY F. CIMINO, and TODD M.
NEJAIME, the defendants, together with others known and unknown, unlawfully,
wilfully and knowingly, directly and indirectly, by use of the means and
instrumentalities of interstate commerce and of the mails, did use and employ
manipulative and deceptive devices and contrivances in violation of Title 17,
Code of Federal Regulations, Section 240.10b-5, by: (a) employing devices,
schemes, and artifices to defraud; (b) making untrue statements of material
facts and omitting to state
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material facts necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading; and (c) engaging in
acts, practices, and courses of business which operated and would operate as a
fraud upon a person, in connection with the purchase and sale of Beachport
securities.
(Title 15, United States Code, Section 78j(b) and 78ff; Title
17, Code of Federal Regulations, Section 240.10b-5;
and Title 18, United States Code, Section 2).
COUNT NINE
(Conspiracy To Commit Securities Fraud,
Wire Fraud, And Commercial Bribery: International Nursing)
The Grand Jury further charges:
76. Paragraphs 1 through 22 of this Indictment are repeated realleged
and incorporated by reference as though fully set forth herein.
THE CONSPIRACY
77. From in or October 1995 through in or about June 1996, in the
Southern District of New York and elsewhere, ROBERT A. LINO, a/k/a "Little
Robert," JAMES S. LABATE, a/k/a, "Jimmy," SALVATORE R. PIAZZA, a/k/a "Sal,"
FRANK A. PERSICO, a/k/a "Frankie," ROBERT P. GALLO, a/k/a "Bobby," WILLIAM F.
PALLA, TODD M. NEJAIME, and VINCENT G. LANGELLA, a/k/a "Vinny," the defendants,
together with others known and unknown, unlawfully, wilfully, and knowingly,
did combine, conspire, confederate, and agree together and with each other to
commit offenses against the
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United States, to wit, to commit: (a) securities fraud, in violation of Title
15, United States Code, Sections 78j(b) and 78ff, and Title 17, Code of Federal
Regulations, Section 240.10b-5; (b) wire fraud, in violation of Title 18, United
States Code, Sections 1343 and 1346; and (c) commercial bribery, in violation of
Title 18, United States Code, Section 1952(a)(3).
OBJECTS OF THE CONSPIRACY
Fraud in Connection with the
Purchase And Sale of Securities
78. It was a part and an object of the conspiracy that ROBERT A. LINO,
a/k/a "Little Robert," JAMES S. LABATE, a/k/a, "Jimmy," SALVATORE R. PIAZZA,
a/k/a "Sal," FRANK A PERSICO, a/k/a "Frankie," ROBERT P. GALLO, a/k/a "Bobby,"
WILLIAM F. PALLA, TODD M. NEJAIME, and VINCENT G. LANGELLA, a/k/a "Vinny," the
defendants, together with others known and unknown, unlawfully, wilfully, and
knowingly, by the use of the means and instrumentalities of interstate commerce
and of the mails, directly and indirectly, would and did use and employ,
manipulative and deceptive devices and contrivances in violation of Title 17,
Code of Federal Regulations, Section 240.10b-5 by: (a) employing devices,
schemes, and artifices to defraud; (b) making untrue statements of material
facts and omitting to state material facts necessary in order to make the
statements made, in the light of the circumstances under which they were made,
not misleading; and (c) engaging in acts, practices, and courses of
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business which operated and would operate as a fraud and deceit upon a person,
in connection with the purchase and sale of International Nursing securities,
all in violation of Title 15, United States Code, Sections 78j(b) and 78ff.
Wire Fraud
79. It was further a part and an object of the conspiracy that ROBERT
A. LINO, a/k/a "Little Robert," JAMES S. LABATE, a/k/a, "Jimmy," SALVATORE R.
PIAZZA, a/k/a "Sal," FRANK A. PERSICO, a/k/a "Frankie," ROBERT P. GALLO, a/k/a
"Bobby," WILLIAM F. PALLA, TODD M. NEJAIME, and VINCENT G. LANGELLA, a/k/a
"Vinny," the defendants, together with others known and unknown, unlawfully,
wilfully, and knowingly, having devised a scheme and artifice to defraud,
including a scheme and artifice, among other things, to (a) deprive a broker's
customer of the intangible right to a broker's honest services, (b) violate a
broker's duty to disclose to his customer all material facts concerning
securities transactions in the customer's account, and (c) obtain the
customer's money and property, would and did transmit and cause to be
transmitted by means of wire communication in interstate and foreign commerce,
writings, signs, signals, pictures and sounds for the purpose of executing such
scheme and artifice, all in violation of Title 18, United States Code, Sections
1343 and 1346.
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Commercial Bribery
80. It was further a part and an object of the conspiracy that ROBERT
A. LINO, a/k/a "Little Robert," JAMES S. LABATE, a/k/a, "Jimmy," SALVATORE R.
PIAZZA, a/k/a "Sal," FRANK A. PERSICO, a/k/a "Frankie," ROBERT P. GALLO, a/k/a
"Bobby," WILLIAM F. PALLA, TODD M. NEJAIME, and VINCENT G. LANGELLA, a/k/a
"Vinny," the defendants, and others known and unknown, unlawfully, willfully,
and knowingly, would and did travel in interstate commerce and use facilities
in interstate and foreign commerce, with the intent to promote, manage,
establish, carry on, and facilitate the promotion, management, establishment,
and carrying on of unlawful activity, specifically, commercial bribery in
violation of New York State Penal Law Sections 180.00 and 180.03, and,
thereafter, would and did perform and attempt to perform an act to promote,
manage, establish, carry on, and facilitate the promotion, management,
establishment, and carrying on of such unlawful activity, all in violation of
Title 16, United States Code, Section 1952(a)(3).
MEANS AND METHODS
81. Among the means and methods by which ROBERT A. LINO, a/k/a "Little
Robert," JAMES S. LABATE, a/k/a, "Jimmy," SALVATORE R. PIAZZA, a/k/a "Sal,"
FRANK A. PERSICO, a/k/a "Frankie," ROBERT P. GALLO, a/k/a "Bobby," WILLIAM F.
PALLA, TODD M. NEJAIME, and VINCENT G. LANGELLA, a/k/a "Vinny," the
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defendants, and their co-conspirators would and did carry out the conspiracy
were the following:
a. ROBERT A. LINO, a/k/a "Little Robert," JAMES S. LABATE, a/k/a,
"Jimmy," SALVATORE R. PIAZZA, a/k/a "Sal," FRANK A. PERSICO, a/k/a "Frankie,"
ROBERT P. GALLO, a/k/a "Bobby," WILLIAM F. PALLA, TODD M. NEJAIME, and VINCENT
G. LANGELLA, a/k/a "Vinny," the defendants, and their co-conspirators, obtained
control of International Nursing securities, including common stock, preferred
stock and warrants, through, among other means, fraudulent securities offerings
that purportedly complied with SEC Regulation S.
b. ROBERT A. LINO, a/k/a "Little Robert," JAMES S. LABATE, a/k/a,
"Jimmy," SALVATORE R. PIAZZA, a/k/a "Sal," FRANK A. PERSICO, a/k/a "Frankie,"
ROBERT P. GALLO, a/k/a "Bobby," WILLIAM F. PALLA, TODD M. NEJAIME, and VINCENT
G. LANGELLA, a/k/a "Vinny," the defendants, engaged in manipulative securities
trades for the purpose of fraudulently inflating the market price of
International Nursing securities.
c. ROBERT A. LINO, a/k/a "Little Robert," JAMES S. LABATE, a/k/a,
"Jimmy," SALVATORE R. PIAZZA, a/k/a "Sal," FRANK A. PERSICO, a/k/a "Frankie,"
ROBERT P. GALLO, a/k/a "Bobby," WILLIAM F. PALLA, TODD M. NEJAIME, and VINCENT
G. LANGELLA, a/k/a "Vinny," the defendants, and their co-conspirators, arranged
for the payment of secret bribes to stock
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broker who caused their customers to buy and hold International Nursing
securities.
d. ROBERT A. LINO, a/k/a "Little Robert," JAMES S. LABATE, a/k/a,
"Jimmy," SALVATORE R. PIAZZA, a/k/a "Sal," FRANK A. PERSICO, a/k/a "Frankie,"
"ROBERT P. GALLO, a/k/a "Bobby," WILLIAM F. PALLA, TODD M. NEJAIME, and VINCENT
G. LANGELLA, a/k/a " Vinny," the defendants, and their co-conspirators, operated
three branches of Monitor in New York, New York that employed fraudulent and
deceptive "boiler rooms" sales practices in connection with sales of
International Nursing securities.
e. ROBERT A. LINO, a/k/a "Little Robert," JAMES S. LABATE, a/k/a,
"Jimmy," SALVATORE R. PIAZZA, a/k/a "Sal," FRANK A. PERSICO, a/k/a "Frankie,"
ROBERT P. GALLO, a/k/a "Bobby," WILLIAM F. PALLA, TODD M. NEJAIME, and VINCENTE
G. LANGELLA, a/k/a "Vinny," the defendants, and their co-conspirators, sold
International Nursing common stock under the control of DMN Capital and related
entities at fraudulently inflated prices.
OVERT ACTS
82. In furtherance of said conspiracy and to effect the objects thereof,
the following overt acts, among others, were committed in the Southern District
of New York and elsewhere:
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a. On or about December 1, 1995, TODD M. NEJAIME, the defendant, and
a co-conspirator not named as defendant herein caused a Monitor customer to
purchase approximately 2,000 shares of International Nursing common stock.
b. On or about October 31, 1995, a co-conspirator not named as
defendant herein caused a Monitor customer to purchase approximately 50,000
shares of International Nursing common stock.
c. On or about January 4, 1996, two co-conspirators not named as
defendants herein caused a Monitor customer to purchase approximately 100,000
International Nursing warrants.
d. On or about December 29, 1995, JAMES S. LABATE, a/k/a, "Jimmy,",
SALVATORE R. PIAZZA, a/k/a "Sal," the defendant, and a co-conspirator not named
as defendant herein caused DMN Capital to issue a check in the name of "Rick
Dane."
e. On or about December 29, 1995, ROBERT P. GALLO, a/k/a "Bobby," the
defendant, cashed a DMN Capital check issued in the name of "Rick Dane."
f. On or about December 29, 1995, ROBERT P. GALLO, a/k/a "Bobby," the
defendant, provided a quantity of cash to FRANK A. PERSICO, a/k/a "Frankie,"
the defendant.
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g. On or about January 5, 1996, VINCENT G. LANGELLA, the defendant,
caused a William Scott customer to purchase 600 shares of International Nursing
common stock.
(Title 18, United States Code, Section 371)
COUNT TEN
(Securities Fraud: International Nursing)
The Grand Jury further charges:
83. Paragraphs 1 through 22 of this Indictment are repeated, realleged and
incorporated by reference as though fully set forth herein.
84. From in or about October 1995 through in or about June 1996, in the
Southern District of New York and elsewhere, ROBERT A. LINO, a/k/a "Little
Robert," JAMES S. LABATE, a/k/a, "Jimmy," SALVATORE R. PIAZZA, a/k/a "Sal,"
FRANK A. PERSICO, a/k/a "Frankie," ROBERT P. GALLO, a/k/a "Bobby," WILLIAM F.
PALLA, TODD M. NEJAIME, and VINCENT G. LANGELLA, a/k/a "Vinny," the defendants,
together with others known and unknown, unlawfully, wilfully and knowingly,
directly and indirectly, by use of the means and instrumentalities of
interstate commerce and of the mails, did use and employ manipulative and
deceptive devices and contrivances in violation of Title 17, Code of Federal
Regulations, Section 240.10b-5, by: (a) employing devices, schemes, and
artifices to defraud; (b) making untrue statements of material facts and
omitting to state material facts
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necessary in order to make the statements made, in light of the circumstances
under which they were made, not misleading; and (c) engaging in acts, practices,
and courses of business which operated and would operate as a fraud upon a
person, in connection with the purchase and sale of International Nursing
securities.
(Title 15, United States Code, Sections 78j(b) and 78ff; Title
17, Code of Federal Regulations, Section 240.10b-5; and
Title 18, United States Code, Section 2).
COUNT ELEVEN
(Securities Fraud: Globus International)
The Grand Jury further charges:
85. Paragraph 1 through 22 of this Indictment are repeated, realleged
and incorporated by reference as though fully set forth herein.
86. At all times relevant to Count Eleven of this indictment, STEPHEN
J. DAPUZZO, the defendant, was a principal of First Liberty Investment Group who
arranged for the enterprise described in Count One of this Indictment to control
two First Liberty branches in New York, New York.
87. From in or about October 1996, up to and including in or about
January 1998, in the Southern District of New York and elsewhere, JAMES S.
LABATE, a/k/a, "Jimmy," SALVATORE R. PIAZZA, a/k/a "Sal," FRANK A. PERSICO,
a/k/a "Frankie," ANTHONY P. STROPOLI, and STEVEN J. DAPUZZO, the defendants,
together with
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others known and unknown, unlawfully, wilfully and knowingly, directly and
indirectly, by use of the means and instrumentalities of interstate commerce and
of the mails, did use and employ manipulative and deceptive devices and
contrivances in violation of Title 17, Code of Federal Regulations, Section
240.10b-5, by: (a) employing devices, schemes, and artifices to defraud; (b)
making untrue statements of material facts and omitting to state material facts
necessary in order to make the statements made, in light of the circumstances
under which they were made, not misleading; and (c) engaging in acts, practices,
and courses of business which operated and would operate as a fraud upon a
person, in connection with the purchase and sale of Globus International
securities.
(Title 15, United States Code, Sections 78j(b) and 78ff; Title
17, Code of Federal Regulations, Section 240.10b-5; and
Title 18, United States Code, Section 2).
COUNT TWELVE
(Money Laundering Conspiracy)
The Grand Jury further charges:
88. Paragraphs 1 through 22 of this Indictment are repeated, realleged and
incorporated by reference as though fully set forth herein.
89. From in or about January 1995 to in or about October 1996, in the
Southern District of New York and elsewhere,
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ROBERT A. LINO, a/k/a "Little Robert," JAMES S. LABATE, a/k/a "Jimmy," FRANK
A. PERSICO, a/k/a "Frankie," SALVATORE R. PIAZZA, a/k/a "Sal," CARY F. CIMINO,
ROBERT P. GALLO, a/k/a "Bobby," and TODD M. NEJAIME, the defendants, together
with others known and unknown, knowing that the property involved in financial
transactions represented the proceeds of some form of unlawful activity, did
knowingly and intentionally conspire to conduct such financial transactions
affecting interstate and foreign commerce, which transactions in fact involved
the proceeds of a specified unlawful activity, namely, securities fraud in
connection with purchases and sales of securities fraud in connection with
purchases and sales of securities issued by Reclaim, Beachport, and
International Nursing, in violation of Title 15, United States Code, Sections
78j(b) and 78ff, (a) with the intent to promote the carrying on of said
specified unlawful activity, and (b) knowing that the transactions were designed
in whole and in part to conceal and disguise the nature, location, source,
ownership and control of the proceeds of said specified unlawful activity, all
in violation of Title 16, United States Code, Section 1956(h).
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COUNT THIRTEEN
(Money Laundering Conspiracy)
The Grand Jury further charges:
90. Paragraphs 1 through 22 of this Indictment are repeated, realleged
and incorporated by reference as though fully set forth herein.
91. At all times relevant to Count Thirteen of this Indictment, RALPH
DEMATTEO, a/k/a "Ralphie," the defendant, was an associate of the Colombo Crime
Family who, among other things, laundered proceeds of securities fraud for
members and associates of the enterprise described in Count One of this
Indictment and others.
92. From in or about December 1999 to the present, in the Southern
District of New York and elsewhere, JAMES S. LABATE, a/k/a "Jimmy," ANTHONY P.
STROPOLI, SALVATORE R. PIAZZA, a/k/a "Sal," MICHAEL T. GRECCO, and RALPH
DEMATTEO, a/k/a "Ralphie," the defendants, together with others known and
unknown, knowing that the property involved in financial transactions
represented the proceeds of some form of unlawful activity, did knowingly and
intentionally conspire to conduct such financial transactions affecting
interstate and foreign commerce, which transactions in fact involved the
proceeds of a specified unlawful activity, namely, fraud in the sale of
securities, in violation of Title 15, United States Code, Sections 78j(b) and
78ff and Title 18,
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and wire fraud, in violation of United States Code, Section 1343, (a) with the
intent to promote the carrying on of said specified unlawful activity, and (b)
knowing that the transactions were designed in whole and in part to conceal and
disguise the nature, location, source, ownership and control of the proceeds of
said specified unlawful activity.
(Title 18, United States Code, Section 1956(h)).
COUNT FOURTEEN
(Union Pension Fund Fraud and Kickback Conspiracy)
The Grand Jury further charges:
93. Paragraphs 1 through 22 of this Indictment are repeated, realleged
and incorporated by reference as though fully set forth herein.
THE CONSPIRACY
94. From in or October 1999 through the present, in the Southern
District of New York and elsewhere, ROBERT A. LINO, a/k/a "Little Robert," JAMES
S. LABATE, a/k/a "Jimmy," SALVATORE R. PIAZZA, a/k/a "Sal," FRANK A. PERSICO,
a/k/a "Frankie," STEPHEN E. GARDELL, JOHN M. BLACK, JR., JOSEPH A. MANN, a/k/a
"Andy," WILLIAM M. STEPHENS, a/k/a "Bill," GLENN B. LAKEN, GENE PHILLIPS, A.
CAL ROSSI, and ANGELO CALVELLO, a/k/a "Tony," the defendants, together with
others known and unknown, unlawfully, wilfully, and knowingly did combine,
conspire, confederate, and agree together and with each other to commit
offenses against the
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United States, to wit, to (a) commit wire fraud, in violation of Title 18,
United States Code, Sections 1343 and 1346; (b) receive unlawful kickbacks with
respect to the operations of employee benefit plans, in violation of Title 18,
United States Code, Section 1954; and (c) pay unlawful kickbacks with respect
to the operations of employee benefit plans, in violation of Title 18, United
States Code, Section 1954; and (d) commit fraud by an investment adviser, in
violation of Title 15, United States Code, Section 80b-6.
OBJECTS OF THE CONSPIRACY
Wire Fraud
95. It was a part and an object of the conspiracy that ROBERT A. LINO,
a/k/a "Little Robert," JAMES S. LABATE, a/k/a "Jimmy," SALVATORE R. PIAZZA,
a/k/a "Sal," FRANK A. PERSICO, a/k/a "Frankie," STEPHEN E. GARDELL, JOHN M.
BLACK, JR., JOSEPH A. MANN, a/k/a "Andy," WILLIAM M. STEPHENS, a/k/a "Bill,"
GLENN B. LAKEN, GENE PHILLIPS, A. CAL ROSSI, and ANGELO CALVELLO, a/k/a "Tony,"
the defendants, together with others known and unknown, unlawfully, wilfully,
and knowingly, having devised a scheme and artifice to defraud and for
obtaining money and property by means of false and fraudulent pretenses, and to
deprive others of their intangible right to the honest services of officials of
labor organizations, would and did transmit and cause to be transmitted by
means of wire communication in interstate and foreign
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commerce, writings, signs, signals, pictures and sounds for the purpose of
executing such scheme and artifice, all in violation of Title 18, United States
Code, Sections 1343 and 1346.
Receipt of Illegal Kickbacks
96. It was a part and an object of the conspiracy that FRANK A. PERSICO,
a/k/a "Frankie," the defendant, and others known and unknown, unlawfully and
knowingly, being trustees of employee pension benefit plans and officers,
counsel, agents, and employees of employee organizations whose members were
covered by employee pension benefit plans, would and did receive and agree to
receive and solicit fees, kickbacks, commissions, gifts, loans, money and
things of value because of and with intent to be influenced with respect to
their actions, decisions and other duties relating to questions and matters
concerning such plans from ROBERT A. LINO, a/k/a "Little Robert," JAMES S.
LABATE, a/k/a "Jimmy," SALVATORE R. PIAZZA, a/k/a "Sal," JOHN M. BLACK, JR.,
JOSEPH A. MANN, a/k/a "Andy," WILLIAM M. STEPHENS, a/k/a "Bill," GLENN B.
LAKEN, GENE PHILLIPS, A. CAL ROSSI, and ANGELO CALVELLO, a/k/a "Tony," the
defendants, in violation of Title 18, United States Code, Section 1954.
Payment of Illegal Kickbacks
97. It was a part and an object of the conspiracy that ROBERT A. LINO,
a/k/a "Little Robert," JAMES S. LABATE, a/k/a "Jimmy," SALVATORE R. PIAZZA,
a/k/a/ "Sal," JOHN M. BLACK, JR.,
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JOSEPH A. MANN, a/k/a "Andy," WILLIAM M. STEPHENS, a/k/a "Bill," GLENN B. LAKEN,
GENE PHILLIPS, A. CAL ROSSI, and ANGELO CALVELLO, a/k/a "Tony," the defendants,
and others known and unknown, unlawfully and knowingly did give, offer, and
promise to give and offer, directly and indirectly, fees, kickbacks,
commissions, gifts, loans, money and things of value to trustees of employee
pension benefit plans and officers, counsel, agents, and employees of employee
organizations whose members were covered by employee pension benefit plans,
including FRANK PERSICO, a/k/a "Frankie," and others, because of and with intent
to influence their actions, decisions and other duties relating to questions and
matters concerning employee pension benefit plans, in violation of Title 18,
United States Code, Sections 1954.
Fraud By An Investment Adviser
98. It was a part and an object of conspiracy that WILLIAM M. STEPHENS, the
defendant, an investment adviser, unlawfully, wilfully and knowingly would and
did, by the use of the means and instrumentalities of interstate commerce,
directly and indirectly, (a) employ a device, scheme, and artifice to defraud
the clients of an investment adviser (b) engage in transactions, practices, and
courses of business which operated as a fraud and deceit upon the clients of an
investment adviser, namely, Husic Capital Management and (c) engage in acts,
practices, and courses of business which were fraudulent and
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deceptive, in violation of Title 15, United States Code, Sections 80b-6 and
80b-17.
MEANS AND METHODS
99. Among the means and methods by which ROBERT A. LINO, a/k/a "Little
Robert," JAMES S. LABATE, a/k/a "Jimmy," SALVATORE R. PIAZZA, a/k/a "Sal," FRANK
A. PERSICO, a/k/a "Frankie," STEPHEN E. GARDELL, JOHN M. BLACK, JR., JOSEPH A.
MANN, a/k/a "Andy," WILLIAM M. STEPHENS, a/k/a "Bill," GLENN B. LAKEN, GENE
PHILLIPS, A. CAL ROSSI, and ANGELO CALVELLO, a/k/a "Tony," the defendants, and
their co-conspirators would and did carry out the conspiracy were the following:
a. ROBERT A. LINO, a/k/a "Little Robert," JAMES S. LABATE, a/k/a
"Jimmy," SALVATORE R. PIAZZA, a/k/a "Sal," FRANK A. PERSICO, a/k/a "Frankie,"
STEPHEN E. GARDELL, JOHN M. BLACK, JR., JOSEPH A. MANN, a/k/a "Andy," WILLIAM M.
STEPHENS, a/k/a "Bill," GLENN B. LAKEN, GENE PHILLIPS, A. CAL ROSSI, and ANGELO
CALVELLO, a/k/a "Tony," the defendants, and their co-conspirators, devised
fraudulent investment products, including ARB Series J Preferred Stock and the
TradeVentureFund, that appeared to be suitable investments for union pension
funds.
b. ROBERT A. LINO, a/k/a "Little Robert," JAMES S. LABATE, a/k/a
"Jimmy," SALVATORE R. PIAZZA, a/k/a "Sal," FRANK A. PERSICO, a/k/a "Frankie,"
STEPHEN E. GARDELL, JOHN M. BLACK, JR., JOSEPH A. MANN, a/k/a "Andy," WILLIAM M.
STEPHENS, a/k/a
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"Bill," GLENN B. LAKEN, GENE PHILLIPS, A. CAL ROSSI, and
ANGELO CALVELLO, a/k/a "Tony," the defendants, and their co-conspirators,
entered into corrupt agreements with union officials pursuant to which such
officials, in return for kickbacks, would cause their pension plans to retain a
corrupt investment adviser.
c. ROBERT A. LINO, a/k/a "Little Robert," JAMES S. LABATE,
a/k/a "Jimmy," SALVATORE R. PIAZZA, a/k/a "Sal," FRANK A. PERSICO, a/k/a
"Frankie," STEPHEN E. GARDELL, JOHN M. BLACK, JR., JOSEPH A. MANN, a/k/a "Andy,"
WILLIAM M. STEPHENS, a/k/a "Bill," GLENN B. LAKEN, GENE PHILLIPS, A. CAL ROSSI,
and ANGELO CALVELLO, a/k/a "Tony," the defendants, and their coconspirators,
planned to cause the corrupt investment adviser, in violation of his fiduciary
duties to his clients, to invest a portion of the union pension assets placed
under management in ARB Series J Preferred Stock and interests in the
TradeVentureFund.
d. ROBERT A. LINO, a/k/a "Little Robert," JAMES S. LABATE,
a/k/a "Jimmy," SALVATORE R. PIAZZA, a/k/a "Sal," FRANK A. PERSICO, a/k/a
"Frankie," STEPHEN E. GARDELL, JOHN M. BLACK, JR., JOSEPH A. MANN, a/k/a
"Andy," WILLIAM M. STEPHENS, a/k/a "Bill," GLENN B. LAKEN, GENE PHILLIPS, A.
CALL ROSSI, and ANGELO CALVELLO, a/k/a "Tony," the defendants, and their
co-conspirators, planned to secretly pay themselves 20% of the face value of all
pension fund investments in ARB
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Series J Preferred and a significant percentage of assets placed in the
TradeVentureFund.
e. ROBERT A. LINO, a/k/a "Little Robert," JAMES S. LABATE,
a/k/a "Jimmy," SALVATORE R. PIAZZA, a/k/a "Sal," FRANK A. PERSICO, a/k/a
"Frankie," STEPHEN E. GARDELL, JOHN M. BLACK, JR., JOSEPH A. MANN, a/k/a "Andy,"
WILLIAM M. STEPHENS, a/k/a "Bill," GLENN B. LAKEN, GENE PHILLIPS, A. CAL ROSSI,
and ANGELO CALVELLO, a/k/a "Tony," the defendants, and their co-conspirators,
planned to use a portion of their illegal profits to pay off union officials and
to divide the remainder among themselves.
OVERT ACTS
100. In furtherance of said conspiracy and to effect the objects
thereof, the following overt acts, among others, were committed in the Southern
District of New York and elsewhere:
a. On or about October 29, 1999, in the vicinity of DMN
Capital's office in lower Manhattan, JAMES S. LABATE, a/k/a "Jimmy," the
defendant, met with ROBERT A. LINO, a/k/a "Little Robert," the defendant, and
another person, and told them that FRANK A. PERSICO, a/k/a "Frankie," the
defendant, controlled at least $20 million in Local 400 pension money.
b. On or about January 4, 2000, FRANK A. PERSICO, a/k/a
"Frankie," met with JAMES S. LABATE, a/k/a "Jimmy," and SALVATORE R. PIAZZA,
the defendants, and another person, at DMN Capital's office in New York, New
York.
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c. On or about January 11, 2000, JOSEPH A. MANN, a/k/a "Andy"
the defendant, attended at meeting at DMN Capital's office.
d. On or about January 20, 2000, A. CAL ROSSI, the defendant,
attended at meeting at DMN Capital's office.
e. On or about January 31, 2000, GENE PHILLIPS, A. CAL ROSSI,
and SALVATORE R. PIAZZA, a/k/a "Sal," the defendants, attended at meeting at DMN
Capital's office.
f. On or about February 3, 2000, FRANK A. PERSICO, a/k/a
"Frankie," the defendant, faxed a copy of Local 400's investment guidelines to
DMN Capital's office.
g. On or about February 9, 2000, GLENN B. LAKEN and JOHN M.
BLACK, JR., the defendants, attended a meeting at DMN Capital's office.
h. On February 18, 2000, JAMES S. LABATE, a/k/a "Jimmy,"
the defendant, met with ROBERT A. LINO, a/k/a "Little Robert," the defendant,
and another person at DMN Capital's office.
i. On or about March 1, 2000, JOHN J. BLACK, Jr. the
defendant, while in DMN Capital's office, participated in a conference call
with GLENN B. LAKEN, the defendant.
j. On or about March 2, 2000, WILLIAM M. STEPHENS, the
defendant, faxed a copy of his resume to DMN Capital's office.
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k. On or about March 22, 2000, WILLIAM M. STEPHENS, GLENN B.
LAKEN, JOSEPH A. MANN, a/k/a "Andy," JOHN J. BLACK, SALVATORE R. PIAZZA, a/k/a
"Sal" and JAMES S. LABATE, the defendants, and others, attended a dinner meeting
at Joseph's Ristorante on Hanover Square in lower Manhattan.
l. On or about March 23, 2000, WILLIAM M. STEPHENS, the
defendant, conducted presentation for union officials at DMN Capital's office
attended by, among others STEPHEN E. GARDELL, the defendant.
m. On or about March 24, 2000, A. CAL ROSSI, and JOSEPH A.
MANN, a/k/a "Andy," attended meetings at DMN Capital's office.
n. On or about April 3, 2000, GENE PHILLIPS and A. CAL ROSSI,
the defendant, attended a breakfast meeting at the St. Regis Hotel in New York,
New York.
o. On or about April 13, 2000, faxed a copy of an airline
ticket issued to STEPHEN E. GARDELL for round trip travel from New York to San
Francisco to DMN Capital's Office.
p. On or about April 14, 2000, STEPHEN E. GARDELL, the
defendant, met with JAMES S. LABATE, a/k/a "Jimmy," the defendant, and others,
at DMN Capital's Office.
q. On or April 19, 2000, STEPHEN E. GARDELL, the defendant,
received $1000 in cash at his home in Staten Island, New York.
(Title 18, United States Code, Section 371).
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COUNT FIFTEEN
(Wire Fraud: Local 400)
The Grand Jury further charges:
101. Paragraphs 1 through 22 of this Indictment are repeated, realleged
and incorporated by reference as though fully set forth herein.
102. On or about March 2, 2000, in the Southern District of New York
and elsewhere, ROBERT A. LINO, a/k/a "Little Robert," JAMES S. LABATE, a/k/a
"Jimmy," FRANK A. PERSICO, a/k/a "Frankie," SALVATORE R. PIAZZA, a/k/a "Sal,"
JOHN M. BLACK, JR., JOSEPH A. MANN, a/k/a "Andy," WILLIAM M STEPHENS, a/k/a
"Bill," GLENN B. LAKEN, GENE PHILLIPS AND A. CAL ROSSI, the defendants,
unlawfully, willfully, and knowingly, having devised and intending to devise a
scheme and artifice to defraud and to obtain money and property by means of
false and fraudulent pretenses, representations and promises, namely, a scheme
and artifice to obtain Production Workers Pension Fund assets by fraudulently
causing them to be invested in ARB Series J Preferred Stock and interests in
TradeVentureFund, transmitted and caused to be transmitted by means of wire
communication in interstate and foreign commerce, writings, signs, signals, and
sounds for the purpose of executing such scheme and artifice, namely a fax
transmission from San Francisco, California to New York, New York.
(Title 18, Untied States Code, Sections 1343, 1346, and 2).
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COUNT SIXTEEN
(Receipt of Illegal Kickbacks: Local 400)
The Grand Jury further charges:
103. Paragraphs 1 through 22 of this Indictment are repeated, realleged
and incorporated by reference as though fully set forth herein.
104. From in or about October 1999 to the present, in the Southern
District of New York and elsewhere, FRANK A. PERSICO, a/k/a "Frankie" the
defendant, being and officer, counsel, agent, and employee of an employee
organization, namely, Production Workers Local 400, whose members are covered by
an employee pension benefit plan subject to title I of the Employee Retirement
Income Security Act, namely, the Production Workers Pension Fund, did unlawfully
and knowingly receive and agree to receive and solicit fees, kickbacks,
commissions, gifts, loans, money and things of value because of and with intent
to be influenced with respect to his actions, decisions and other duties
relating to questions and matters concerning such plan, namely, the selection of
an investment adviser and the investment of plan assets in Series J Preferred
Stock and interests in TradeVentureFund, from ROBERT A. LINO, a/k/a "Little
Robert," JAMES S. LABATE, a/k/a "Jimmy," SALVATORE R. PIAZZA, a/k/a "Sal," JOHN
M. BLACK, JR., JOSEPH A. MANN, a/k/a "Andy," WILLIAM M.
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STEPHENS, a/k/a "Bill," GLENN B. LAKEN, GENE PHILLIPS, and A. CAL ROSSI.
(Title 18, United States Code, Sections 1954 and 2).
COUNT SEVENTEEN
(Payment of Illegal Kickbacks: Local 400)
The Grand Jury further charges:
105. Paragraphs 1 through 22 of this Indictment are repeated,
realleged and incorporated by reference as though fully set forth herein.
106. From in or about October 1999 to the present, ROBERT A. LINO,
a/k/a "Little Robert," JAMES S. LABATE, a/k/a "Jimmy," SALVATORE R. PIAZZA,
a/k/a "Sal," JOHN M. BLACK, JR., JOSEPH A. MANN, a/k/a "Andy," WILLIAM M.
STEPHENS, a/k/a "Bill," GLENN B. LAKEN, GENE PHILLIPS; and A. CAL ROSSI, the
defendants, and others known and unknown, unlawfully, willfully and knowingly
did directly and indirectly give and offer, and promise to give and offer a
fee, kickback, commission, gift, loan, money and thing of value to FRANK
PERSICO, a/k/a "Frankie," who was an officer, counsel, agent, and employee of
an employee organization any of whose members are covered by an employee
pension benefit plan, namely, the Production Workers Pension Fund, because of
and with intent to influence with respect to, any of PERSICO's actions,
decisions and other duties relating to any question and matter concerning such
plan.
(Title 18, United States Code, sections 1954 and 2).
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COUNT EIGHTEEN
(Wire Fraud: DEA Annuity Fund)
The Grand Jury further charges:
107. Paragraphs 1 through 22 of this Indictment are repeated, realleged and
incorporated by reference as though fully set forth herein.
108. On or about April 13, 2000, in the Southern District of New York and
elsewhere, ROBERT A. LINO, a/k/a "Little Robert," JAMES S. LABATE, a/k/a
"Jimmy," STEPHEN E. GARDELL, SALVATORE R. PIAZZA, a/k/a "Sal," JOHN M. BLACK,
JR., JOSEPH A. MANN, a/k/a "Andy," WILLIAM M. STEPHENS, a/k/a "Bill," GLENN B.
LAKEN, GENE PHILLIPS, and A. CAL ROSSI, the defendants, unlawfully, willfully,
and knowingly, having devised and intending to devise a scheme and artifice to
defraud and to obtain money and property by means of false and fraudulent
pretenses, representations and promises, namely, a scheme and artifice to obtain
assets of the Annuity Fund of the Detectives' Endowment Association by
fraudulently causing them to be invested in ARB Series J Preferred Stock and
interests in TradeVentureFund, transmitted and caused to be transmitted by means
of wire communication in interstate and foreign commerce, writings, signs,
signals, and sounds for the purpose of executing such scheme and artifice,
namely a fax transmission from San Francisco, California to New York, New York.
(Title 18, United States Code, Sections 1343 and 2).
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COUNT NINETEEN
(Theft of Honest Services: DEA)
The Grand Jury further charges:
107. Paragraphs 1 through 22 of this Indictment are repeated, realleged and
incorporated by reference as though fully set forth herein.
110. On or about April 24, 2000, in the Southern District of New York and
elsewhere, ROBERT A. LINO, a/k/a "Little Robert," JAMES S. LABATE, a/k/a
"Jimmy," STEPHEN E. GARDELL, SALVATORE R. PIAZZA, a/k/a "Sal," JOHN M. BLACK,
JR., JOSEPH A. MANN, a/k/a "Andy," WILLIAM M. STEPHENS, a/k/a "Bill," GLENN B.
LAKEN, GENE PHILLIPS, and A. CAL ROSSI, the defendants, unlawfully, willfully,
and knowingly, having devised and intending to devise a scheme and artifice to
defraud, namely, a scheme and artifice to deprive the Detectives' Endowment
Association of GARDELL's honest services, transmitted and caused to be
transmitted by means of wire communication in interstate and foreign commerce,
writings, signs, signals, and sounds for the purpose of executing such scheme
and artifice, namely, a telephone call in interstate commerce between San
Francisco, California and New York, New York.
(Title 18, United States Code, Sections 1343, 1346, and 2).
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COUNT TWENTY
(Payment of Illegal Kickbacks: Local 137)
The Grand Jury further charges:
111. Paragraphs 1 through 22 of this Indictment are repeated, realleged
and incorporated by reference as though fully set forth herein.
112. From on or about April 5, 2000 to the present, ROBERT A. LINO,
a/k/a "Little Robert," JAMES S. LABATE, a/k/a "Jimmy," SALVATORE R. PIAZZA,
a/k/a "Sal," ANGELO CALVELLO, a/k/a "Tony," JOHN M. BLACK, JR., JOSEPH A MANN,
a/k/a "Andy," WILLIAM M. STEPHENS, a/k/a "Bill," GLENN B LAKEN, GENE PHILLIPS,
AND A. CAL ROSSI, and the defendants, and others known and unknown,
unlawfully and knowingly did give and offer, and promise to give and offer,
directly and indirectly, fees, kickbacks, commissions, gifts, loans, money and
things of value to persons who were officers, counsel, agents, and employees of
an employee organization, namely, officers of the International Union of
Operating Engineers Local 137 located in Briarcliff Manor, New York, whose
members were covered by an employee pension benefit plan, namely, the pension
plans of IUOE Local 137 137A 137B 137C 137R AFL-CIO, because of and with intent
to influence their actions, decisions and other duties relating to questions and
matter concerning such plan, namely, the selection of an
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investment adviser and the investment of plan assets in Series J Preferred
Stock and interests in TradeVentureFund.
(Title 18, United States Code, Sections 1954 and 2).
COUNT TWENTY-ONE
(Securities Fraud: GTrade)
The Grand Jury further charges:
113. Paragraphs 1 through 22 of this Indictment are repeated,
realleged and incorporated by reference as though fully set forth herein.
114. From in or about January 2000 through in or about March 2000, in
the Southern District of New York and elsewhere, ROBERT A. LINO, JAMES S.
LABATE, a/k/a, "Jimmy," FRANK A. PERSICO, a/k/a "Frankie," JOSEPH A. MANN,
a/k/a "Andy," and VINCENT G. LANGELLA, a/k/a "Vinny," the defendants, together
with others known and unknown, unlawfully, willfully, and knowingly, by the use
of the means and instrumentalities of interstate commerce and of the the mails,
directly and indirectly, used and employed manipulative and deceptive devices
and contrivances in violation of Title 17, Code of Federal Regulations, Section
240.10b-5, by (a) employing devices, schemes, and artifices to defraud, (b)
making untrue statements of material facts and omitting to state material facts
necessary in order to make the statements made, in the light of the
circumstances under which they were made, not misleading, and (c) engaging in
acts,
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practices, and courses of business which operated and would operate as a fraud
and deceit upon a person, in connection with the purchase and sale of GTrade
common stock.
(Title 15, United States Code, Sections 78j(b) and 78ff; Title
17, Code of Federal Regulations, Section 240.10b-5; and
Title 18, United States Code, Section 2).
COUNT TWENTY-TWO
(Theft Of Honest Services: NYPD)
The Grand Jury further charges:
115. Paragraphs 1 through 22 of this Indictment are repeated,
realleged and incorporated by reference as though fully set forth herein.
Background
116. From in or about early 1997 to the present, STEPHEN E. GARDELL,
the defendant, corruptly exploited his position as a detective in the New York
City Police Department by soliciting and receiving cash, property, and other
things of value in return for (a) communicating confidential law enforcement
information concerning organized crime investigations to, among others, JAMES
S. LABATE, a/k/a "Jimmy," an associate of the Gambino Crime Family and a member
of the enterprise described in Count One of this Indictment; (b) facilitating
and attempting to facilitate the issuance of New York City Police Department
pistol "carry" permits for LABATE, and SALVATORE R. PIAZZA, a/k/a "Sal," among
others, and (c) influencing the outcome of an
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official NYPD investigation into MICHAEL T. GRECCO, the defendant, a member of
the enterprise described in Count One of this Indictment; and (d) providing
LABATE, PIAZZA and others such benefits as valid New York City law enforcement
parking permits.
117. In addition to cash, the other things of value that STEPHEN E.
GARDELL, the defendant, corruptly received in return for providing the
information, services and items described in the preceding paragraph, included,
but were not limited to, the following:
a. At least $8,000 in money orders made payable to the contractor
that built a swimming pool in GARDELL's backyard;
b. Free and substantially discounted rooms and meals (commonly
referred to as "comps") at casino hotels in Las Vegas, Nevada and Atlantic
City, New Jersey; and
c. A fur coat.
Statutory Allegation
118. On or about December 1, 1999, in the Southern District of New
York and elsewhere, JAMES S. LABATE, a/k/a "Jimmy," STEPHEN E. GARDELL, and
SALVATORE R. PIAZZA, a/k/a "Sal," the defendants, unlawfully, willfully, and
knowingly, having devised and intending to devise a scheme and artifice to
defraud, namely, a scheme and artifice to deprive the New York City Police
Department of GARDELL's honest services, transmitted
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and caused to be transmitted by means of wire communication in interstate and
foreign commerce, writings, signs, signals, and sounds for the purpose of
executing such scheme and artifice, namely, a telephone call in interstate
commerce between Las Vegas, Nevada and New York, New York.
(Title 18, United States Code, Sections 1343, 1346, and 2).
COUNT TWENTY-THREE
(Witness Tampering)
The Grand Jury further charges:
119. Paragraphs 1 through 22 of this Indictment are repeated,
realleged and incorporated by reference as though fully set forth herein.
120. On or about August 3, 1999, in the Southern District of New York,
CARY F. CIMINO, the defendant, unlawfully, willfully, and knowingly, corruptly
persuaded and attempted to persuade another person, with intent to influence,
delay, and prevent the testimony of a cooperating witness in an official
proceeding and hinder, delay and prevent the communication to a law enforcement
officer of information relating to the commission and possible commission of a
Federal offense, namely, CARY F. CIMINO, the defendant, solicited the murder of
a person he believed to be a cooperating witness to prevent his further
cooperation and testimony.
(Title 18, United States Code, Sections 1512(b) and 2).
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COUNT TWENTY-FOUR
(Securities Fraud: Ranch*1)
The Grand Jury further charges:
121. Paragraphs 1 through 22 of this Indictment are repeated, realleged
and incorporated by reference as though fully set forth herein.
122. From in or about December 1999 to the present, in the Southern
District of New York and elsewhere, JAMES LABATE, a/k/a "Jimmy," SEBASTIAN
RAMETTA, a/k/a "Sebbie," JAMES F. CHICKARA, and ANGELO CALVELLO, a/k/a "Tony,"
the dependants, and others known and unknown, unlawfully, wilfully, and
knowingly, in the offer and sale of Ranch*1 securities by the use of the means
and instruments of transportation and communication in interstate commerce and
by the use of the mails, directly and indirectly, did: (a) employ devices,
schemes, and artifices to defraud; (b) obtain money and property by means of
untrue statements of material fact and omit to state material facts necessary in
order to make the statements made, in light of the circumstances under which
they were made, not misleading; and (c) engage in transactions, practices and
courses of business which operated and would operate as a fraud and deceit upon
the purchasers of the common stock of Ranch*1.
(Title 15, United States Code, Sections 77q and 77x;
and Title 18, United States Code, Section 2.)
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COUNT TWENTY-FIVE
(Securities Fraud: Manhattan Soup Man)
The Grand Jury further charges:
123. Paragraphs 1 through 22 of this Indictment are repeated, realleged
and incorporated by reference as though fully set forth herein.
124. From in or about November 1999 to the present, in the Southern
District of New York and elsewhere, JAMES S. LABATE, a/k/a "Jimmy," SALVATORE R.
PIAZZA, a/k/a "Sal," SEBASTIAN RAMETTA, a/k/a "Sebbie," and JAMES F. CHICKARA,
the defendants, and others known and unknown, unlawfully, wilfully, and
knowingly, in the offer and sale of Manhattan Soup Man securities by the use of
the means and instruments of transportation and communication in interstate
commerce and by the use of the mails, directly and indirectly, did: (a) employ
devices, schemes, and artifices to defraud; (b) obtain money and property by
means of untrue statements of material fact and omit to state material facts
necessary in order to make the statements made, in light of the circumstances
under which they were made, not misleading; and (c) engage in transactions,
practices and courses of business which operated and would operate as a fraud
and deceit upon the purchasers of Manhattan Soup Man common stock.
(Title 15, United States Code, Sections 77q and 77x;
and Title 18, United States Code, Section 2.)
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COUNT TWENTY-SIX
(Securities Fraud: Healthwatch)
The Grand Jury further charges:
125. Paragraphs 1 through 22 of this Indictment are repeated, realleged
and incorporated by reference as though fully set forth herein.
126. From in or about October 1999 through in or about November 1999,
in the Southern District of New York and elsewhere, JAMES S. LABATE, a/k/a
"Jimmy," and MICHAEL T. GRECCO, the defendant, together with others known and
unknown, unlawfully, willfully, and knowingly, by the use of the means and
instrumentalities of interstate commerce and of the mails, directly and
indirectly, used and employed manipulative and deceptive devices and
contrivances in violation of Title 17, Code of Federal Regulations, Section
240.10b-5, by (a) employing devices, schemes, and artifices to defraud, (b)
making untrue statements of material facts and omitting to state material facts
necessary in order to make the statements made, in the light of the
circumstances under which they were made, not misleading, and (c) engaging in
acts, practices, and courses of business which operated and would operate as a
fraud and deceit upon a person, in connection with the purchase and sale of
Healthwatch common stock.
(Title 15, United States Code, Sections 78j(b) and 78ff; Title
17, Code of Federal Regulations, Section 240.10b-5; and
Title 18, United States Code, Section 2).
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FORFEITURE ALLEGATION
127. The allegations contained in Counts One and Two of this Indictment
are hereby realleged and incorporated by reference for the purpose of alleging
forfeiture pursuant to the provisions of Title 18, United States Code, Section
1963.
128. Through the aforesaid pattern of racketeering activity, ROBERT A.
LINO, a/k/a "Little Robert," JAMES S. LABATE, a/k/a "Jimmy," FRANK A. PERSICO,
a/k/a "Frankie, "ANTHONY P. STROPOLI, SALVATORE R. PIAZZA, a/k/a "Sal," STEPHEN
E. GARDELL, CARY F. CIMINO, SEBASTIAN RAMETTA, a/k/a "Sebbie," JAMES F.
CHICKARA, ROBERT P. GALLO, a/k/a "Bobby," MICHAEL T. GRECCO, JOHN M. BLACK JR.,
ANGELO CALVELLO, a/k/a "Tony," JOSEPH A. MANN, a/k/a "Andy," WILLIAM M.
STEPHENS, a/k/a "Bill," GLENN B. LAKEN, GENE PHILLIPS, A. CAL ROSSI, VINCENT G.
LANGELLA, a/k/a "Vinny," WILLIAM F. PALLA, and TODD M. NEJAIME, the defendants,
have property constituting, and derived from, proceeds which they obtained,
directly and indirectly, from racketeering activity in violation of Title 18,
United States Code, Section 1962, thereby making such property, or an amount of
cash equivalent thereto, forfeitable to the United States of America pursuant to
Title 18, United States Code, Section 1963(a)(3). The intent of the United
States of America to forfeit such property includes, but is not
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limited to, at least the sum of $15,000,000 in United States currency, which
includes but is not limited to, all right, title and interest of the
aforementioned defendants in
a. Any and all bank accounts at HSBC in New York, New York in the name
of Crabbe Capital Group, Ltd. or Portly Trading Corp.;
b. Any and all brokerage accounts at Wall Street Equities, New York,
New York in the name of Crabbe Capital Group, Ltd. or SBG Advisors, Ltd.; and
c. Any and all brokerage accounts at Dain Rauscher & Co. in New York,
New York in the name of Crabbe Capital Group; all of which constitute proceeds
obtained from racketeering activity.
129. Said defendants are jointly and severally liable to the United
States for these amounts described in the preceding paragraph.
Substitute Assets Provision
130. If any of the property described above as being subject to
forfeiture, as a result of any act or omission of the defendants--
(a) cannot be located upon the exercise of due diligence;
(b) has been transferred or sold to, or deposited with, a
third party;
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(C) has been placed beyond the jurisdiction of the court;
(d) has been substantially diminished in value; or
(e) has been commingled with other property which cannot be
divided without difficulty;
it is the intention of the United States, pursuant to Title 18, United States
Code, Section 1963(m), to seek forfeiture of any other property of the
defendants up to the value of the forfeitable property, including, but not
limited to, the following property:
(i) Any right, title, and interest held by JAMES LABATE, a/k/a
"Jimmy," the defendant, in the real property and appurtenances known as 282
South Railroad Street, Staten Island, New York.
(ii) Any right, title, and interest held by SALVATORE R. PIAZZA, the
defendant, in real property and appurtenances known as 8 Dehart Avenue, Hewitt,
New Jersey.
(iii) Any right, title, and interest held by FRANK A. PERSICO, a/k/a
"Frankie," the defendant, in the real property and appurtenances known as 129
Salamander Court, Staten Island, New York.
(iv) Any right, title, and interest held by ANTHONY
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P. STROPOLI, the defendant, in the real property and appurtenances known as 24
Surrey Drive, Old Bridge, New Jersey.
(v) Any right, title, and interest held by ROBERT P. GALLO, a/k/a
"Bobby," the defendant, in the real property and appurtenances known as 132
Windswept Lane, Freehold, New Jersey.
(vi) Any right, title, and interest held by MICHAEL T. GRECCO, the
defendant, in the real property and appurtenances known as 28 Maine Avenue,
Staten island, New York.
(vii) Any right, title, and interest held by VINCENT G. LANGELLA,
a/k/a "Vinny," the defendant, in the real property and appurtenances known as
21 Lorraine Loop, Staten Island, New York.
(viii) Any right, title, and interest held by WILLIAM F. PALLA, the
defendant, in the real property and appurtenances known as 141 Cardiff Lane,
Haverford, Pennsylvania.
(Title 18, United States Code, Section 1963(a).)
/s/ ILLEGIBLE /s/ MARY JO WHITE
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FOREPERSON MARY JO WHITE
United States Attorney
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