Post by siriusnews on Jul 27, 2011 13:44:21 GMT -5
AP) NEW YORK — A former investment manager known as Wall Street's "bad boy" was convicted Tuesday of defrauding U.S. and European investors of $140 million, promising them rich returns while blowing their money on a lifestyle that included private jets, home renovations, prostitutes, strippers and classy London hotels.
Ross Mandell, 53, shook his head throughout the reading of the verdict that convicted him of conspiracy and securities fraud charges. The jury also convicted a co-defendant, Adam Harrington, 41, of Miami.
The Brooklyn born-Mandell was the former chief executive officer of the brokerage firm Sky Capital, which had offices in London, New York, Florida and New Jersey. Harrington was a senior broker for the firm.
The jury had deliberated over parts of three days during a five-week trial. After jurors left the courtroom, Mandell's sobbing wife hugged him for several minutes.
U.S. District Judge Paul A. Crotty did not immediately rule on a request by prosecutors to jail Mandell as a threat to flee, leaving him free on $5 million bail.
Defense attorney Jeffrey C. Hoffman promised to appeal, saying there were significant issues that must be resolved regarding stocks on foreign exchanges that became significant during the trial. During closing arguments last week, Hoffman had accused the government of overreaching.
He said the $140 million scope of the alleged fraud would mean federal sentencing guidelines would recommend a significant jail term, though he had not yet calculated how long. The top charge, securities fraud, alone carries a potential sentence of up to 20 years in prison.
The trial captured the hard-partying lifestyle brokers enjoyed during the dot-com boom of the late 1990s and early 2000s.
An exhibit introduced at trial by prosecutors showed that Mandell charged $162,000 on credit cards at adult entertainment clubs in London and New York from May 2001 through January 2006.
Prosecutors portrayed Mandell and Harrington as con men, saying they capitalized on the excitement over Internet tech stocks by using their broker-dealer operation to solicit private investments in startups. Prosecutors said the defendants spent some of investor money living lavishly with private jets, expensive vacations, fancy cars and flashy watches. They said the men manipulated the value of stocks they sold to investors in part by paying brokers 400 percent commissions to promote the stocks.
The scheme came to an end when one of the brokers was caught lying to an FBI undercover officer. The broker agreed to secretly tape-record conversations with Mandell.
Assistant U.S. Attorney Katherine Goldstein told jurors in closing arguments that Mandell told his brokers to target foreign investors because they didn't hang up the phone like Americans.
"They are not jaded like we are," Goldstein said Mandell told the brokers. "They are easier to convince. All you have to do is say the name Wall Street."
The prosecutor said Mandell treated his brokers to the fast life in London, spending $1.34 million at the nicest hotels in Europe and bringing plenty of petty cash for strip clubs and prostitutes. She said his company credit card carried more than 200 charges to adult entertainment venues, part of $440,000 he used for personal expenses that included family vacations to Disney World and his personal cable bill.
She said Mandell made $7.3 million in salary at two businesses that returned nothing for investors while Harrington made $3.1 million in salary as his right-hand man.
Mandell, who has homes in Manhattan and Boca Raton, Fla., with his wife and two young daughters, was arrested in 2009. He has said he is a recovering alcoholic, fitness maven and family man who quit the fast lifestyle of the late 1990s and early years of the new century.
He has embraced his "bad boy" image and says he overindulged in fast-lane excesses before getting sober and becoming rich.
An admitted co-conspirator who testified against Mandell at trial said that money raised from investors was spent on "strip clubs and prostitutes."
During the prosecution, Mandell has maintained a high profile. He has promoted his cause on his personal website, rossmandell.com, Facebook, YouTube and a guest spot on a cable talk show.
"I'm coming to you live, uncut, unedited, uncensored, unfiltered and ... I am still under arrest," he says in of several pretrial clips posted on his website.
Mandell left court quietly, clutching his wife.
www.cbsnews.com/stories/2011/07/26/ap/business/main20083879.shtml
Ross Mandell, 53, shook his head throughout the reading of the verdict that convicted him of conspiracy and securities fraud charges. The jury also convicted a co-defendant, Adam Harrington, 41, of Miami.
The Brooklyn born-Mandell was the former chief executive officer of the brokerage firm Sky Capital, which had offices in London, New York, Florida and New Jersey. Harrington was a senior broker for the firm.
The jury had deliberated over parts of three days during a five-week trial. After jurors left the courtroom, Mandell's sobbing wife hugged him for several minutes.
U.S. District Judge Paul A. Crotty did not immediately rule on a request by prosecutors to jail Mandell as a threat to flee, leaving him free on $5 million bail.
Defense attorney Jeffrey C. Hoffman promised to appeal, saying there were significant issues that must be resolved regarding stocks on foreign exchanges that became significant during the trial. During closing arguments last week, Hoffman had accused the government of overreaching.
He said the $140 million scope of the alleged fraud would mean federal sentencing guidelines would recommend a significant jail term, though he had not yet calculated how long. The top charge, securities fraud, alone carries a potential sentence of up to 20 years in prison.
The trial captured the hard-partying lifestyle brokers enjoyed during the dot-com boom of the late 1990s and early 2000s.
An exhibit introduced at trial by prosecutors showed that Mandell charged $162,000 on credit cards at adult entertainment clubs in London and New York from May 2001 through January 2006.
Prosecutors portrayed Mandell and Harrington as con men, saying they capitalized on the excitement over Internet tech stocks by using their broker-dealer operation to solicit private investments in startups. Prosecutors said the defendants spent some of investor money living lavishly with private jets, expensive vacations, fancy cars and flashy watches. They said the men manipulated the value of stocks they sold to investors in part by paying brokers 400 percent commissions to promote the stocks.
The scheme came to an end when one of the brokers was caught lying to an FBI undercover officer. The broker agreed to secretly tape-record conversations with Mandell.
Assistant U.S. Attorney Katherine Goldstein told jurors in closing arguments that Mandell told his brokers to target foreign investors because they didn't hang up the phone like Americans.
"They are not jaded like we are," Goldstein said Mandell told the brokers. "They are easier to convince. All you have to do is say the name Wall Street."
The prosecutor said Mandell treated his brokers to the fast life in London, spending $1.34 million at the nicest hotels in Europe and bringing plenty of petty cash for strip clubs and prostitutes. She said his company credit card carried more than 200 charges to adult entertainment venues, part of $440,000 he used for personal expenses that included family vacations to Disney World and his personal cable bill.
She said Mandell made $7.3 million in salary at two businesses that returned nothing for investors while Harrington made $3.1 million in salary as his right-hand man.
Mandell, who has homes in Manhattan and Boca Raton, Fla., with his wife and two young daughters, was arrested in 2009. He has said he is a recovering alcoholic, fitness maven and family man who quit the fast lifestyle of the late 1990s and early years of the new century.
He has embraced his "bad boy" image and says he overindulged in fast-lane excesses before getting sober and becoming rich.
An admitted co-conspirator who testified against Mandell at trial said that money raised from investors was spent on "strip clubs and prostitutes."
During the prosecution, Mandell has maintained a high profile. He has promoted his cause on his personal website, rossmandell.com, Facebook, YouTube and a guest spot on a cable talk show.
"I'm coming to you live, uncut, unedited, uncensored, unfiltered and ... I am still under arrest," he says in of several pretrial clips posted on his website.
Mandell left court quietly, clutching his wife.
www.cbsnews.com/stories/2011/07/26/ap/business/main20083879.shtml