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U.S. indicts 85 for stock fraud
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June 16, 1999: 4:00 p.m. ET
Defendants allegedly defrauded investors of more than $100 million
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NEW YORK (CNNfn) - The U.S. attorney's office in Brooklyn indicted 89 defendants Wednesday for defrauding thousands of investors of more than $100 million.
Federal authorities arrested 41 people Wednesday morning in connection with three separate stock fraud schemes, some of whom had ties to Italian or Russian organized crime rings.
Zachary Carter, the U.S. attorney for New York's eastern district, said four of the 89 defendants overlapped in each of the three cases. The largest case involved 55 defendants being charged with securities fraud, mail and wire fraud, money laundering and obstruction of justice for carrying out an eight-year scheme involving four brokerage houses.
In that case, United States v. Catoggio, federal authorities contend the defendants conspired to manipulate the stocks and/or warrants of more than 17 companies trading on the OTC or Nasdaq small cap markets.
That scheme was allegedly led by Robert Catoggio and Roy Ageloff, who are accused of using four brokerage houses -- Sterling & Co., Norfolk Securities Corp., Royal Palm Investments and Capital Planning Associates -- to acquire large blocks of securities of small and start-up companies by paying kickbacks to principals of the securities' issuers and then manipulating market prices.
Twenty-three defendants face similar charges for orchestrating a massive stock fraud and money laundering scheme controlled by an alliance between what prosecutors called "traditional organized crime" and Russian crime rings. That scheme, allegedly run by Dominick Dionisio and Enrico Locasio, reputed associates of the Colombo crime family, allegedly generated $10 million in profits.
Finally, 11 people were indicted for selling to the public approximately $8 million of virtually worthless stock in Auxer Industries Inc. between April 1995 and December 1995.
Allegedly led by Christopher Wolf, the defendants co-conspirators in that case allegedly obtained a large chunk of the Ridgewood, N.J.-based company's stock and then artificially inflated its price by paying brokers to recommend and sell shares to the public.
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Department of Justice
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