Sunday, July 15, 2007

Wall Street & the Mafia

Mob's Bully Market
Probers hear taped threat
Daily News Staff Writer

With the raw and violent threats of a mob-tainted stock promoter echoing through a stunned hearing room, Congress yesterday got a taste of the mob's infestation of Wall Street.

The tape — of a promoter threatening to kill a reluctant participant in a multimillion-dollar stock scam — was the highlight of the House finance subcommittee hearing on La Cosa Nostra's spreading Wall Street influence.
"I said, 'Do yourself a favor. I'm on my way to Arizona,'" promoter Claudio Iodice warned in the secretly recorded call. "Keep yourself out of the office, because if I even see you, you're [expletive] getting hit."

Members of the subcommittee grilled the FBI, the Securities and Exchange Commission and regulators from the National Association of Securities Dealers on the need for new methods to wage the latest version of the war against the mob.

Rep. Michael Oxley with a copy of Sunday's Daily News.

"The M-O-B has gone back to school and gotten an M.B.A.; the wiseguys are getting smart," declared subcommittee chairman Michael Oxley (R-Ohio), holding up the Sunday Daily News front page: THE MOB ON WALL ST.
"They used to play the ponies," said Oxley. "Now they're playing the markets — and investors — for everything they're worth."

As pols sat in silence, the FBI played a June 1997 tape of Iodice talking with Eugene Lombardo, a reputed associate of the Bonanno crime family who was running a big-money pump-and-dump scheme.

Iodice was enraged at the CEO of an Arizona firm who was trying to back out.

"I'm going to Arizona to his family's house," Iodice threatened.

"Unbelievable," replied Lombardo. "When do you want to go?"

"I wanna go to Arizona today. I want to knock on his wife's door, kick it in and ... hold his family hostage," Iodice screamed. "I'm gonna ... knife him. He took away something I like; I'm taking away something he likes."

Iodice still faces charges, while Lombardo has pleaded guilty to securities fraud and is serving an eight-year sentence. Their case is one of nine major mob-on-Wall-Street cases brought in the past three years.

Thomas Fuentes, chief of the FBI's organized crime unit, said law enforcement is particularly worried about the mob's recent use of Internet Web sites and e-mail to hype the stock of dubious and sometimes bogus companies. "Not only can it reach a broader pool of potential victims, but the perpetrators can operate with a certain measure of anonymity," he warned.

Noting that gangsters typically target loosely regulated over-the-counter microcap stocks, regulators cited several new ways to crack down on the mob, including:

Tightening up reporting requirements for companies that trade in the microcap market.

Requiring firms that hire a certain percentage of brokers from houses with disciplinary records to tape-record all of their brokers' sales pitches.

Original Publication Date: 9/14/00

Mob Muscles in on Market (9/10/00)
'Chip' Found Himself Working for Buy or Die Securities' (9/10/00)