Abuses alleged in mob's Wall Street forays 19 charged with extortion, fraud

use of violence noted

November 27, 1997|By BLOOMBERG NEWS

NEW YORK -- Italian and Russian crime families have introduced an element of violence to some small companies and Wall Street brokerages, a federal prosecutor said yesterday.

"Scams used to be done with financial incentives," said Alan Vickery, the business and securities fraud chief for the U.S. attorney's office in Brooklyn. "Now the mob has added violence by threatening personal harm to mainstream brokers who may have found themselves with gambling debts or some other exposure."

Vickery made his comments a day after 19 people, including members of the Genovese and Bonanno organized-crime families, were charged in a federal indictment with securities fraud, wire fraud, extortion and bank fraud.

The case, brought by the U.S. attorney's office in Manhattan, was the fourth in eight months that alleges organized-crime abuses on Wall Street.

One defendant, Rosario "Rossi" Gangi, was a capo in the Genovese family, and another, Frank "Curly" Lino, was a capo in the Bonanno family, the indictment alleged. Capos, or bosses, supervise members known as soldiers, and report to the highest-ranking members of their crime families.

Another defendant, a stock promoter named Claudio Iodice, was accused of telling the chairman of HealthTech International Inc., Gordon Hall, that he would knife members of Hall's family if he wasn't paid adequately for manipulating the stock. Iodice's attorney couldn't be reached.

Earlier this month, federal prosecutors in Brooklyn charged 13 people with stock fraud linked to the Gambino crime family in a case allegedly involving violence.

Globus Group Inc.'s top executives and 14 others, including members of Russian crime groups, were charged with fraud in April for scheming to inflate the company's stock price, Vickery said.

One broker, Igor Stolyar, and his father, Alik, were accused of trying to hire a hit man in Canada to kill people who they thought were extorting money from the younger Stolyar and other brokers of Globus stock.

William McLucas, the Securities and Exchange Commission's enforcement director, said the SEC, Justice Department, the National Association of Securities Dealers and other agencies are increasing the resources they devote to stopping organized crime on Wall Street. The SEC "is participating in a number of such investigations," he said.

McLucas stressed that organized crime's influence remains extremely limited on Wall Street -- restricted to some penny stocks that are thinly traded on the Nasdaq Small-Cap Market or RTC the over-the-counter bulletin board.

Vickery said organized-crime groups typically lack the expertise to manipulate stocks and rely on vulnerable brokers that they can co-opt with bribes or threats. "Someone with a gambling habit is an easy target," he said.

Pub Date: 11/27/97

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